The Australian Securities and Investments Commission (ASIC) says insurance claims handling is one of its new enforcement priorities for 2024. 

Compliance with financial hardship obligations and the reportable situations regime have also been added to ASIC’s list of enforcement priorities next year. 

In relation to the superannuation industry, ASIC has added member services failures and misconduct relating to the erosion of superannuation balances. 

Of relevance also to the insurance industry is ASIC’s decision to continue with its enforcement focus on poor distribution of financial products. 

“Last year, we set ambitious enforcement priorities in part as a response to industry and consumer demand for more transparency on our key areas of focus,” ASIC Deputy Chair Sarah Court said. 

“The enforcement priorities hold us, as a regulator, accountable, and importantly, they send a clear compliance and deterrence message to the entities we regulate.” 

She told the recently held ASIC Annual Forum that next year the regulator is “turning our attention to failures in insurance claims handling” after actively focusing on pricing failures by the industry this year. 

“For consumers in the unfortunate situation of needing to claim on their insurance policy, timely and fair claims handling is crucial,” she said. 

“We will focus on delays in claims handling, poor communication and record keeping, and inappropriate use of exclusions.” 

On the reportable situations regime, she says ASIC’s work in the area suggests compliance is low, with a “disappointing” 89% of licensees not reporting against this regime at all. 

“These reporting rates suggest we need a stronger approach to compliance in this area, and we have recently commenced a targeted surveillance of those licensees who are not reporting to us as we would expect,” Ms Court said. 

Under the regime, Australian financial services (AFS) licensees and Australian credit licensees are automatically required to submit notifications to ASIC about some reportable situations, which include deemed “significant” breaches of “core obligations” specified in the Corporations Act 2001 and National Consumer Credit Protection Act 2009.   

McCabes Principal Mathew Kaley says it would be prudent for insurers to make sure that processes for identifying and managing compliance incidents are properly documented and operating effectively in practice as ASIC steps up focus on the reportable situations regime. 

Click here for the 2024 enforcement priority list.