Insurers’ handling of fraudulent claims will face scrutiny under the Australian Securities and Investments Commission’s (ASIC) focus on financial product and service provider practices.

The regulator aims to identify practices that may lead to poor outcomes for investors and consumers, including vulnerable people.

The surveillance project features in ASIC’s corporate plan for this financial year through to 2020/21.

ASIC will also continue efforts to improve the way add-on insurance products are sold via car dealerships – a project that started last financial year.

It aims to “drive changes to insurers’ governance for the design and distribution of add-on insurance products… [and] to address systemic poor consumer outcomes in this market”.

In ASIC’s summary of “what good looks like” in the sectors under its watch, insurers and related service providers are expected to:

• Act professionally, treat consumers fairly and prioritise consumers’ interests
• Sell a range of products and services with features aligned with consumers’ needs, and deliver value for money
• Ensure consumers are fully compensated when losses result from poor conduct.

“We will continue to progress proactive surveillances that are aimed at improving consumer outcomes in financial services,” Chairman Greg Medcraft says. “Where we detect misconduct, we will take enforcement action.”