Swann had preferred to take an industry-wide approach to the add-on insurance issue, through the Insurance Council of Australia, as wider concerns over the products were raised by the regulator, Mr Bessell says.

Mr Costello highlights emails showing that the Australian Securities and Investments Commission had become frustrated over the slow pace of industry action on the issue and had given insurers a "dressing down" at a meeting in 2015.

Mr Bessell says Swann may have taken a more pro-active approach if it had responded independently, but the "industry approach was one that was preferred."

That partly reflected a view that commissions were the main problem and that an industry-wide approach would be more effective.  Swann was made aware of potential problems specific to its own add-on sales in December of 2015, the commission hears.