The Australian Securities and Investments Commission (ASIC) has released an estimate of levies it expects to collect from the insurance sector for regulatory work carried out during the financial year.

Insurance product providers will pay about $28.041 million, insurance product distributors $2.712 million and claims handling and settling services providers $4.834 million.

Overall ASIC expects to recover $352 million of regulatory costs via cost recovery levies and statutory levies for 2022/23.

“Under the ASIC industry funding model, the Australian Government determines our budget,” ASIC said.

“We then recover our regulatory costs through industry funding levies (cost recovery levies and statutory levies) and fees for service.”

The regulator says its insurance focus areas in 2022/23 include pricing misconduct, design and distribution obligations compliance and developing guidance for the Financial Accountability Regime.

ASIC says the figures in the Cost Recovery Implementation Statement (CRIS) 2022/23 are indicative only. Invoices will be issued between January and March next year after actual levies have been calculated.

The Insurance Council of Australia has responded to the ASIC cost levy estimates, saying the industry supports ASIC’s critical role in the sector.

“Our work with regulators reflects our focus on ensuring regulation is fit for purpose and in the interests of consumers, striking a balance of reducing the regulatory burden for insurers, to avoid greater costs being passed on to consumers,” a spokesperson said.

The ASIC CRIS statement says the estimated cost of regulating insurance product providers has increased to $28 million from $24.3 million in 2021/22.

National Insurance Brokers Association CEO Phil Kewin says “it’s a relief to see that in a time when virtually everything is costing more, the ASIC costs to regulate insurance product distributors, which includes brokers, have actually gone down.”

ASIC estimates the cost of regulating insurance product distributors declined to $2.7 million from $3.1 million.

“Despite the number of participants increasing by 3%, the overall costs to regulate distributors, including brokers, reduced by 13%, while surveillance and enforcement costs were down 18%,” Mr Kewin told insuranceNEWS.com.au.
 
“These are positive indicators that in some part demonstrate the industry’s commitment to professionalism and self-regulation.”