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Industry welcomes legislative framework review

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Insurance industry representatives have welcomed an Australian Law Reform Commission (ALRC) review of financial services regulation legislation.

The Federal Government has asked the ALRC to carry out the three-year review after the Hayne royal commission found the law is overly complex and should be simplified.

National Insurance Brokers Association CEO Dallas Booth says there is “general confusion” about a number of key principles such as personal advice/general advice, and retail/wholesale clients.

“We share the views of the Hayne royal commission in relation to the need to simplify the law,” Mr Booth said. “The review is very welcome and we look forward to making a significant contribution.”

The Insurance Council of Australia (ICA) says it has been in discussion with Treasury about implementation of the Hayne recommendations and “the potential simplification of laws that regulate financial services in Australia”.

“ICA, and members, have explored the possible approaches that [we] could adopt and we look forward to talking in detail with the ALRC,” spokesman Campbell Fuller told insuranceNEWS.com.au.

The ALRC says a first interim report focusing on the appropriate use of definitions in corporations and financial services legislation is due by November 31 next year.

A second interim report focusing on regulatory design and the hierarchy of primary law provisions, regulations, class orders and standards, is due by September 30, 2022.

A third interim report focusing on potential reframing or restructuring of Chapter 7 of the Corporations Act is due by August 25, 2023, and a consolidated final report is due by November 30, 2023.

“This complexity of corporations and financial services laws makes it harder for consumers and regulated entities to understand how the law applies to them and increases their regulatory compliance burden,” Attorney General Christian Porter said.

“The review will provide a principled blueprint for a more efficient, navigable and adaptive legislative framework for corporations and financial services regulation that would allow industry and consumers to more easily understand their rights, obligations and the intent and effect of the law.”

The ALRC says it will carry out wide consultation, including with the financial services sector.