ASIC Review Puts Life Insurance Sector Under Scrutiny
ASIC Review Puts Life Insurance Sector Under Scrutiny
0
The Australian Securities and Investments Commission (ASIC) has spotlighted significant shortcomings in the direct sale of life insurance products, urging the industry to reassess its sales practices.
The recent review unearthed ongoing issues with remuneration structures, indicating that some insurers still link commissions to sales targets, potentially fostering aggressive sales tactics.
The study further revealed a troubling rise in claims disputes, with reported cases more than doubling since 2018, raising concerns about the transparency and trustworthiness of these policies.
ASIC Commissioner, Alan Kirkland, has communicated to industry leaders that their proactive measures in addressing these issues will be pivotal in determining ASIC's future actions, which may include investigations or enforcement measures. The review aimed to evaluate improvements in consumer outcomes following previous assessments and the implementation of recommendations from the Hayne Royal Commission.
Despite acknowledging advancements by certain firms, Kirkland emphasised that many areas still require urgent attention, particularly in direct sales channels. He advised that companies share the key findings with their boards and integrate necessary reformative actions into their operational strategies.
This development marks a critical point for consumers and the insurance industry alike. The highlighted deficiencies in selling practices and the rising disputes could erode customer trust, impacting consumer confidence and satisfaction. For businesses, the implications of increased regulatory oversight could necessitate costly adjustments and reforms to align with improved consumer protection standards. This scrutiny underscores the delicate balance between profit motives and ethical sales practices that insurers must navigate.
The life insurance sector is poised for significant changes as companies must now pivot to enhance their consumer dealings and rectify the flagged issues. This could lead to a wave of policy revisions and perhaps an industry-wide overhaul of sales incentive structures. Expert voices anticipate that ASIC will closely monitor the industry's response, with non-compliance potentially leading to stricter regulations or sanctions.
As these developments unfold, stakeholders will be watching closely to see how insurers adapt and whether these changes lead to tangible improvements in consumer protection and satisfaction.
Published:Tuesday, 26th Aug 2025 Source: Paige Estritori
In an era where cyber threats are increasingly sophisticated, CFC Underwriting Limited has unveiled a unique opportunity for brokers to fortify their expertise through its newly launched Cyber Masterclass. This initiative offers a flexible, on-demand video learning series designed to advance brokers into proficient cyber insurance specialists at their convenience. - read more
New South Wales (NSW) is undertaking a detailed review of its Compulsory Third Party (CTP) insurance scheme as well as its lifetime care and support system. The Standing Committee on Law and Justice of the state's upper house has initiated this examination as part of their routine practice conducted every parliamentary term. The last thorough assessment took place in 2022. - read more
A recent decision by the Australian Financial Complaints Authority (AFCA) has ruled against a homeowner seeking an $18,000 refund from Allianz. The homeowner claimed that the insurer failed to adequately inform her about substantial increases in her optional flood cover premiums. Initially, her monthly payments surged from $369 to $1277 in August 2022, a change she only noticed in March of the following year through her bank statements. - read more
Insurance premiums for group life policies with long-term benefits have surged between 15% to 25% on average in the first half of the year, according to a mid-year market update from Marsh Australia. While the steepest increases affected those with adverse claims experiences, short-term rates and premiums for permanent disabilities remained relatively steady. The sector has also become more selective, with insurers adopting stricter underwriting standards, particularly eschewing high-risk industries. - read more
The federal government's initiative to accelerate housing development by relaxing certain building regulations has raised alarm within the insurance sector. Housing Minister Clare O’Neil announced changes on social media, indicating a strategic pause on parts of the National Construction Code to expedite building approvals and encourage the construction of much-needed homes across Australia. This move comes in response to challenges in the approval process, which often delays construction. - read more
Welcome to our comprehensive guide on comparing insurance options for mixed farming. As a rural farm owner, you face unique challenges that require specialized insurance coverage to protect your livelihood. - read more
Managing a farm involves juggling many uncertainties and potential risks. Risk management in farming refers to the process of identifying, assessing, and prioritising risks associated with agricultural activities. Effective risk management ensures that farmers can handle obstacles and continue their operations smoothly. - read more
In the world of farming, risks are an everyday reality. Whether you're dealing with unpredictable weather, pest invasions, or fluctuating market prices, the uncertainties can be overwhelming. This is where farm insurance comes into play. - read more
Australia's agricultural sector stands as a testament to the resilience and ingenuity of its farmers. Yet, this stalwart industry faces one of its greatest challenges: climate change. Rising temperatures, erratic weather patterns, and extreme events, from droughts to floods, are now common hurdles on the landscape of Australian farming. - read more
Risk mitigation is a strategy used to prepare for and lessen the effects of potential risks faced by rural farmers. It involves identifying potential threats and taking proactive steps to minimize their impact. - read more
Knowledgebase
Term Life Insurance: A life insurance that provides a cover for a specific period of time - usually one to five years or until the insured reaches age 65 or 70.
