The Australian Securities and Investments Commission (ASIC) has listed misconduct in industries including insurance as one of its key focus areas as the corporate regulator seeks to use its new regulatory powers to protect consumers.

Acting Chairman Karen Chester says “it is time for us to simply get on with it” now that the regulator has been provided with tools such as new product intervention powers to crack down on poor corporate practices and behaviour.

She told a banking and wealth forum last week that ASIC’s enforcement focus now encompasses misconduct like poor claims handling and product mis-selling to exploit the pandemic environment.

Beyond its near-term COVID enforcement radar, misconduct in insurance and superannuation are two of six target areas that ASIC has set its sights on.

The other four are illegal phoenix activity, auditor misconduct, new and emerging types of misconduct using new technologies, and significant market misconduct such as insider trading, market manipulation and continuous disclosure matters.

“As we move into our better regulatory age, we will make effective use of our new tools afforded us by the Parliament,” Ms Chester said. “So we have the tools. The software script is written. Now we just need to let the program run, while we watch and act if the program fails to deliver the desired outcomes.”

She says the design and distribution obligations laws, which will commence on October 5 next year, is a “step change” for the financial services industry. Businesses that comply with the new regime “can and should provide scope for less enforcement action” from ASIC.

“It may also provide an opportunity for deregulatory initiatives over time. It’s really up to business to pave the way for such deregulation to ultimately be contemplated by Government.”.

Ms Chester says product intervention power, available since last year, has enabled the regulator to temporarily intervene to respond to consumer detriment in a targeted, calibrated and timely way.

ASIC is still considering using the power in relation to the sale of add-on insurance, warranty products sold with motor vehicles and continuing credit products.

“Because [the product intervention power] is proactive and flexible, ASIC only needs to take enforcement action if there is non-compliance coupled with significant consumer detriment,” Ms Chester said. “So ASIC’s new age is here. And we are getting on with it.”

Australian Prudential Regulation Authority (APRA) Chairman Wayne Byres, who also spoke at the forum, says the regulator’s ongoing work to overhaul remuneration standards is an important component of a resilient financial system.

He says APRA’s revised proposals, which have been put up for consultation, will deliver a “meaningful improvement to remuneration practices”.

“No doubt we will learn from experience, and the review after four years that we have committed to may well bring further change if needed,” Mr Byres said. “But what we are putting in place is aligned to the direction industry is already heading.

“The intent is to accelerate and embed that shift and provide a consistent industry baseline to promote better outcomes and underpin longer-term system stability.”

In its revised proposal, APRA no longer calls for a 50% cap on financial performance criteria for bonus-type payments, instead saying “material weight” must be placed on non-financial measures.

Payment deferral periods for variable remuneration have also been slightly shortened, reflecting arguments that longer delays may put Australia out of step with global practices and make it more difficult to attract and retain staff.