The cost to life insurers of supplying more data to the Australian Securities and Investments Commission (ASIC) has been estimated at $37 million a year.

ASIC says many submissions on changes to the industry have raised concerns at the scope of data collection by the regulator.

Issues include providing historical data, the causes and reasons for the exit of all policies, details of policies inforce, altered policies and trends in the structure of policies, and details of distribution channels.

A number of insurers told ASIC they do not collect data on how policies are sold through different distribution channels such as personal or general advice.

The timing of the data collection regime has also been questioned, with some insurers saying they cannot meet the July 1 start.

In response to criticisms, ASIC says it has modified the scope of information collected.

“Ideally we would collect the broad range of data on which we consulted on a policy-by-policy basis,” the regulator says.

“However, after further consideration of the practicalities involved in collecting data on a policy-by-policy basis, we have modified the scope of the information we intend to collect from insurers. The policy data collected will now be aggregated.”

ASIC says it intends to finalise the scope of data collection before the program starts next January 1.

“We plan to collect the data at least twice during the reporting period [next January 1 to December 31 2020]. We may also collect data again in 2021 to assess whether there has been an increase in lapse rates after the two-year clawback period ends.”

ASIC has also dismissed industry pleas for grandfathering of commissions in the transition period.

Commissions on policies taken out before the June 30 deadline have been grandfathered until the policy is changed.

There is a provision for grandfathering to remain if the change is an administrative error, if an application is submitted before the deadline but the policy issued after, or if the policy had an option to add cover.

One submission suggested the same approach be taken where these situations arise during the transition period in 2019.

But ASIC says “extending the grandfathering provisions to the transition period would be inconsistent with the objectives of the reforms”.