The Australian Financial Complaints Authority (AFCA) wants commissions and claims ratios included in compulsory disclosures for add-on insurance sold with motor vehicles.

The Australian Securities and Investments Commission (ASIC) is consulting on a product intervention order that includes a deferred sales model and an online roadmap for consumers.

“We agree with the four compulsory disclosures ASIC has included,” AFCA says in a submission. “Given, however, the issues identified with add-on products, it is critical that comparable and complete information about the costs, risks and benefits of the products are provided as part of the online consumer roadmap.”

Disclosures should also include total premiums, significant features, the policy duration, and the potential for duplicate cover, it says.

Information could be provided to explain the product claims ratio and it should be clear that the product is optional, and whether it is sold by other distributors.

AFCA CEO David Locke says all issuers of add-on products should be members of the complaints body, while intermediaries should also join if a member is not responsible for their conduct.

“Given the findings by ASIC on the low value that add-on products provide and the unprecedented circumstances due to the COVID-19 pandemic, it is essential to ensure all consumers entering these types of products have access to free and independent external dispute resolution to raise any issues about these products,” he said.

ASIC’s revised intervention order was released for feedback earlier this month after a consultation paper was first issued last year.