The Australian Securities and Investments Commission (ASIC) says new rules may be needed for comparison websites, while it also supports making disaster risk data available so consumers better understand the level of insurance they need.

“There is merit in evaluating the need to maintain a minimum standard of comparison services through specific regulation,” ASIC says in a response to the Financial System Inquiry’s interim report.

“However, we also think there is an opportunity for industry-led regulation.”

It says industry standards could go beyond an explicit regulatory regime, following the example of the European Insurance and Occupational Pensions Authority.

The European authority’s principles include identifying website ownership, presenting a list of features other than price and making it clear if recommendations are from affiliates.

ASIC says compelling the industry to provide usable data to facilitate comparisons is another option.

Consumers will also benefit if standardised natural disaster risk ratings are given for areas or properties, so buyers better understand the cover they need, according to the regulator.

“No single agency holds comprehensive or standardised natural disaster risk data, but efforts are being made by a number or agencies,” the response says.

“If this data were linked to the insurance calculators provided by insurers, then consumers could make an informed decision about how much to insure their property.”

The submission reiterates ASIC’s call for a more flexible regulatory tool kit with broad intervention powers.

It cites an example of making insurers show previous-year premiums on renewal documents when prices have jumped sharply.

“While a simple measure, this would generate greater consumer awareness of rising premiums, and encourage them to seek a better deal with their current insurer or move to a new one.”

ASIC supports a “limited last-resort compensation scheme” for unpaid consumer claims in financial services, given the limitations of professional indemnity insurance.