Overlaps between the Australian Securities and Investments Commission (ASIC), the Australian Prudential Regulation Authority (APRA) and the Australian Stock Exchange (ASX) must raise questions about the viability of the “twin peaks” regulatory model, says Suncorp CEO John Mulcahy.

He wonders whether the twin regulator model of ASIC and APRA – recommended by the Wallis inquiry – is still the most appropriate model for the Australian marketplace.

“Nine years on from the Wallis inquiry there is a need for a review to test the success of the Wallis recommendations and identify further areas for rationalisation in financial services regulation,” he told the Insurance Council of Australia Outlook Conference in Melbourne on Friday.

Mr Mulcahy says the majority of insurers accept regulation is necessary but he is concerned the “pendulum is swinging too far in the regulatory direction and this is stifling business with little or no apparent benefit to the stakeholders”.

“The ultimate goal should to be ensure that Australia has one system of practical, quality corporate governance, underpinned by light-handed regulation and strong penalties for flagrant breaches,” he said.

Mr Mulcahy says the industry’s total regulatory environment with overlaps between APRA, ASIC and the ASX, as well as inconsistent levels of legislation at all levels of government, has a significant financial impact on insurance companies, particularly when it comes to compliance.

“In the past five years the general insurance industry has coped with at least 11 major regulatory upheavals at the Commonwealth level, which includes the introduction of GST through to APRA changes and the revised industry code of practice,” he said. “There have also been numerous studies and legislation at state and federal levels in relation to stamp duties, workers’ compensation, CTP and fire services funding.

“Governments and regulators must realise that the regulatory burden being placed on insurers is disadvantaging them and generating increased consumer costs,” Mr Mulcahy said.