Australian Securities and Investments Commission (ASIC) Executive Director Compliance Jennifer O’Donnell thinks some insurance company’s breach records are looking “too perfect”, and has warned the industry to report breaches properly.

She told the Insurance Council of Australia’s NSW conference in Sydney on Friday that it is “better to err on the side of reporting breaches rather than not reporting them at all”. She says reporting breaches will “act in licensees’ favour”.

Since the Financial Services Reform Act came into action on March 11 2004, there have been 1600 reports of breaches, but only a tiny 3% of these have been passed on for enforcement action.

Ms O’Donnell told delegates a number of financial services companies have had very few reports of breaches, which makes the regulator nervous. “We’re looking into that,” she said. “We want to see if they’re perfect or not.”

She said ASIC also wants companies to report individual breaches. “If breaches aren’t reported, and an individual is fired and joins another business, then that’s a total industry problem, whether it’s insurers or brokers.”

Companies should be scrupulous with their employee background checks, as the regulator has found they are “not always thorough”.