The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) are continuing to put pressure on unauthorised foreign insurers operating into the Australian market. APRA has made it plain it will concentrate on the distributors of the insurers’ policies, while ASIC is concentrating on the consumer protection aspects.

Ian Johnston, ASIC’s Executive Director Financial Services Regulation, told the Insurance Council of Australia's Canberra conference last week that the ASIC “campaign” will also focus on the distribution aspects. It intends to review distribution channels and the range of business placed, as well as the amount of disclosure being given to consumers.

The processes being used for the handling of client money will also be watched, Mr Johnston said. “In some classes 10% of the business is going offshore to unauthorised foreign insurers,” he said. “If they try to go direct in the Australian market, they will fall under our regulatory control.”