Brought to you by:
Vero
Vero

Draft product regulations fail to address ICA concerns

Facebook Twitter LinkedIn Google

Draft regulations for financial product design and distribution obligations have not addressed Insurance Council of Australia (ICA) concerns over how the rules will apply when policies are renewed.

Insurers have warned that processes could be unnecessarily lengthened, to the frustration of consumers, if obligations to ensure products are sold correctly are triggered at each renewal.

Treasury released the draft regulations last week after Federal Parliament earlier this year passed legislation to prevent the mis-selling of financial products.

“The ICA is in discussion with the Government and other stakeholders and will be putting our case in a submission,” a spokeswoman told insuranceNEWS.com.au.

The National Insurance Brokers Association is also scrutinising the draft regulations after previously raising concerns.

“We will be looking at them in great detail because this is crucially important for brokers in their role as distributors of products and also crucially important to the broader insurance process,” CEO Dallas Booth told insuranceNEWS.com.au.

Earlier this year the National Insurance Brokers Association warned of a potential conflict in broker statutory duties if a policy is clearly in the best interests of a client who falls outside a target market determination developed by an insurer.

The laws will be enforced by the Australian Securities and Investments Commission after a transition period that ends in April 2021.

Comment on the draft regulations is due by October 11. Details are available  here.