The Australian Securities and Investments Commission (ASIC) says it is “concerned about aspects of the life insurance industry” and will put the market under scrutiny.

“We have served notices on a range of insurers to gather information on the industry,” Deputy Chairman Peter Kell told the Association of Financial Advisers conference at the Gold Coast.

“We will be looking at policies and remuneration, leading to a major surveillance of the industry.”

Findings will be released in a public report next year.

ASIC has identified several issues since the implementation of the Future of Financial Advice reforms three months ago, including monitoring of third-party service providers.

“Make sure you undertake your due diligence on these providers,” Mr Kell told conference delegates last week.

“This also applies to due diligence on authorised representatives. It seems obvious, but it is not being done.”

He says another area of concern is the best-interests duty.

Lessons learned during the AAA dealer group licence cancellation will be applied to the rest of the life industry, Mr Kell says.

“Poor life insurance advice is only one element and the problems we found with the AAA [group] are also occurring in other licensees.”

Mr Kell says the regulator reviewed more than 100 files at AAA, and 80% contained life insurance advice. “Of that figure, 80% contained inappropriate advice, including unnecessary changing of policies.”

ASIC cancelled AAA’s licence in February.