The Australian Securities and Investments Commission is seeking feedback on a revised proposal of product intervention on add-on insurance sold with motor vehicles.

ASIC made changes to the draft order after earlier consultation in October and says it is considering using the product intervention power to help address “ongoing significant consumer detriment in this market”.

The proposed product intervention order would complement ASIC’s proposed industry-wide deferred sales model for add-on insurance, to be implemented as part of the Government’s response to the Hayne royal commission.

The deferred sales model and additional obligations set out in the draft order are tailored to the unique risks consumers experience when offered add-on products in relation to the sale of motor vehicles, ASIC says.

ASIC first released its “Taking consumers for a ride” report on the matter in 2016 which it says sets out a “detailed analysis of how this market is failing consumers in the design, pricing and sales of add-on insurance”.

ASIC has already secured remediation with 11 insurers, one underwriting agency and one warranty provider and refunded more than $130 million to more than 245,000 consumers.

The regulator says the latest feedback will help ASIC consider whether, and if so how, to exercise the product intervention power.

Submissions should be sent by August 19 to product.regulation@asic.gov.au.

Following are some of the amendments made by ASIC to the previous draft order. The full list of changes can be seen here.

• The title of the order now refers to ‘add- on motor vehicle financial risk products’.

• The order now provides for a general transition period of three months.

• ‘Add-on insurance product’ has been changed to ‘add-on motor vehicle financial risk product’ to include both insurance and warranty products.

• The order includes a definition of a new class of ‘assistance insurance products’.

• The class of products ‘loan or lease termination insurance products’ has been removed.

• The product class ‘comprehensive motor vehicle insurance’ is now defined.

• ‘Warranty product’ has been substituted for ‘extended warranty product’ and defined. This definition now expressly excludes comprehensive motor vehicle insurance.

• ASIC specifies the types of information for which it can request a written statement; and the draft provides that ASIC may only request a written statement once every six months.

• A new condition has been added prohibiting the sale of mechanical risk products where a retail client has a certain level of cover under a manufacturer warranty.

• A new condition has been added stating that mechanical risk products must provide cover for at least 12 months.