Regulatory attempts to cut red tape by allowing insurers to use electronic disclosure documents have fallen foul of the Insurance Contracts Act.

The Australian Securities and Investments Commission (ASIC) wants to offer relief from the Corporations Act to enable insurers to deliver product disclosure statements electronically.

It says many consumers would prefer this and it could cut business costs.

But the Insurance Council of Australia (ICA) has told ASIC that while it supports moves to facilitate and enable more innovative forms of disclosure, insurers cannot take advantage of the key proposals because of their obligations under the Insurance Contracts Act.

It says ASIC can only provide relief under the Corporations Act, even though there is no reason for insurers to have different rules for electronic disclosure.

“The industry is keen to leverage off the momentum created by the Financial System Inquiry in considering more innovative forms of disclosure, and it would be disappointing if the identified regulatory barriers were to impede progress in this area,” it says.

ICA says insurers will need amendments to the Insurance Contracts Act and/or the Electronic Transactions Act.