A specialist life insurance company distributing loan protection policies through finance consultants as been ordered to tighten up its compliance procedures.

Sydney-based Australian Life Insurance Distribution (ALI Group) will now be required to appoint an external compliance consultant until June 30 next year and must submit regular reports to the Australian Securities and Investments Commission (ASIC).

The company reported to ASIC last December that it had failed to inform the regulator of new authorised representative appointments, failed to put their details on its financial services guides and undertook business outside the conditions of its financial services licence.

As part of ASIC’s additional compliance conditions on ALI Group, the compliance consultant will have to report on the number of representatives appointed, the number of policy applications submitted and the adequacy of compliance resources within the company.

ASIC Commissioner Peter Kell says while the regulator acknowledges ALI came to the commission with the issues, it is important for companies to have strong controls in place.

“ASIC will intervene to impose more onerous licence conditions to satisfy us and the broader community that licensees are meeting the standards expected of financial services participants.”