The Insurance Council of Australia (ICA) is continuing “to engage in constructive discussions” with the Australian Securities and Investments Commission (ASIC) to resolve concerns over add-on product sales through car dealerships.

“The industry has agreed to pursue a deferred sales model to enhance decision-making for consumers when considering the purchase of insurance through the motor dealer channel,” ICA spokesman Campbell Fuller said.

ICA is developing a model with members that would apply to all products sold through dealers, for ASIC’s consideration. The model would exclude comprehensive motor vehicle insurance and compulsory third party cover.

He says insurers are also strengthening their systems to prevent sales to consumers who would receive little or no benefit from the products, while ICA is examining the issue as part of the General Insurance Code of Practice review, and has developed online content to improve awareness.

ASIC Chairman Greg Medcraft told an ICA forum in February the industry had “fallen short” in responding to concerns about the sale of such products.

The regulator reiterated its disappointment in a letter sent to ICA in May, according to details published today in newspaper The Australian under freedom of information laws.

“Where there are stated timeframes, these are often unacceptably long, and there is no explanation as to why more speedy progress is not possible,” ASIC Senior Manager Emma Curtis says in the letter.