Concern over ASIC’s EDR scheme changes
The Australian Securities and Investments Commission’s (ASIC) overhaul of external dispute resolution (EDR) schemes has angered some industry groups.
From January all EDR schemes will be required to deal with claims worth up to $500,000 but will be allowed to limit the amount of compensation payable to less than that amount.
Also, from 2012 the schemes will only be allowed to limit the amount of compensation payable per claim to a minimum of $280,000, or $150,000 if the claim relates to an insurance broker.
The Financial Planning Association (FPA) says the increased costs involved in making the changes will most likely be borne by consumers.
CEO Jo-Anne Bloch says professional indemnity insurance premiums are likely to rise to accommodate the changes. FPA members use the financial services section of the Financial Ombudsman Service.
“We are extremely disappointed that no mention has been made of our significant concerns with the transparency and fairness of the regime, which would have facilitated a more effective scheme and one that has the confidence of its members,” Ms Bloch said.
From January all EDR schemes will be required to deal with claims worth up to $500,000 but will be allowed to limit the amount of compensation payable to less than that amount.
Also, from 2012 the schemes will only be allowed to limit the amount of compensation payable per claim to a minimum of $280,000, or $150,000 if the claim relates to an insurance broker.
The Financial Planning Association (FPA) says the increased costs involved in making the changes will most likely be borne by consumers.
CEO Jo-Anne Bloch says professional indemnity insurance premiums are likely to rise to accommodate the changes. FPA members use the financial services section of the Financial Ombudsman Service.
“We are extremely disappointed that no mention has been made of our significant concerns with the transparency and fairness of the regime, which would have facilitated a more effective scheme and one that has the confidence of its members,” Ms Bloch said.