Regulators should take a holistic approach to reviewing an avalanche of reforms introduced since the Hayne royal commission, while also allowing plenty of time to see how they operate in practice, the Insurance Council of Australia (ICA) says.

The industry navigated some of the most comprehensive regulatory reforms seen in nearly two decades last year, it says in a submission to the Financial Regulator Assessment Authority.

“The time is right for all stakeholders, government, and industry alike, to reflect, let the reforms take effect, consider the overall strategic goals for the insurance sector and measures of success, one of which should be a vibrant and innovative market for insurance,” it says.

The submission recommends the Government provide industry at least three years to embed the reforms, with data gathered over that time to inform a post-implementation review in October 2024.

ICA also proposes that the Australian Securities and Investments Commission (ASIC) be given the power to take the lead on future industry test cases.

In the UK, the Financial Conduct Authority (FCA) launched the test case over business interruption cover during the pandemic, but similar regulatory powers are not available in Australia.

Locally, the first and second business interruption test cases have been undertaken through protocol agreements between the Australian Financial Complaints Authority (AFCA), participating insurers and ICA.

“AFCA cannot initiate its own test case and once it provides approval for a test case it is not involved in the filing or running of a test case or any appeals,” the submission says.

ASIC is better placed to bring a test case, as happens under the FCA model, ICA says.