ICA, NIBA make case for products bill clarity
Insurers have pressed their case for product design and distribution legislation changes at a Senate committee inquiry, and will seek more clarity from the regulators.
The proposed legislation is designed to prevent mis-selling of products across financial services, but requirements for mass-market insurance policies such as home and motor remain unclear.
Insurance Council of Australia (ICA) GM Policy Regulation John Anning told the Senate Economics Legislation Committee hearing in Melbourne last week the rules may also mean underwriting information needs to be unnecessarily re-collected at each renewal, adding to costs and inefficiencies.
“Treasury has understood the point, but, as I understand it, the overall scheme of the legislation is to keep it at a very high level and they didn’t want to go into sector-specific detail,” Mr Anning said.
“We think it is such an important point that we’d prefer certainty.”
The Senate committee is due to deliver its report on the proposed design and distribution obligations and product intervention powers legislation by Friday.
Insurers and brokers are also preparing to raise their concerns with the Australian Securities and Investments Commission (ASIC), which will provide regulatory guidance once legislation is passed.
National Insurance Brokers Association CEO Dallas Booth says there will be costs involved in making changes, but the legislation does not make it clear how the process will work for insurers or brokers.
“We need to resolve that well before the legislation takes effect, so everyone can understand the process, insurers can adjust their systems and we can all move ahead in accordance with requirements,” he told insuranceNEWS.com.au.
“We are hoping we can sit down with Treasury and ASIC, with the insurers, in the very near future.”