The Insurance Council of Australia (ICA) has backed proposed measures to supervise the sale of add-on insurance and warranties at car dealerships.

The Australian Securities and Investments Commission (ASIC) is seeking feedback on its plan for a deferred sales model and enhanced supervision obligation.

“General insurance products distributed through motor dealer intermediaries can play an important role in protecting the financial security of consumers,” ICA says in a submission on the proposals.

“Distribution through dealerships allows consumers to consider and purchase these products at the same time as they purchase or finance their vehicles.

“At the same time, the industry recognises the need to ensure consumers are protected and given the time and mental space necessary to properly consider their insurance purchases.”

ICA prefers a sales model with a four-day deferral period, and suggests adding an educational resource such as product-specific videos to help consumers decide if a product meets their needs.

“The industry would be keen to develop this resource in consultation with ASIC,” it says.

“This would complement other innovative product information developed individually by insurers.”

ICA members also back providing a concise information sheet for consumers with key details of products, including the cost of insurance, that the add-on is optional and any key policy terms and conditions to be eligible for cover.