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Insurance claims handling – options to increase ASIC’s oversight

This consultation process has now been completed.
Date
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Consultation Type
Consultation Paper

In October 2016, the Australian Securities and Investments Commission (ASIC) released a report outlining the findings of its review into claims handling practices in the life insurance industry. ASIC undertook the review at the request of the Government following media claims in March 2016 about mishandling of life insurance claims by CommInsure. While the review did not find evidence of cross-industry misconduct, it did identify areas of concern and the report included several recommendations to the Government to improve ASIC’s ability to oversee insurance claims handling.

One of these recommendations related to Regulation 7.1.33 of the Corporations Regulations 2001. This regulation excludes certain activities carried on in the course of handling or settling an insurance claim from the definition of providing a financial service under the Corporations Act 2001 (Corporations Act). This exemption, which covers both general and life insurance, in effect exempts claims handling activities from the requirements in the Corporations Act, limiting ASIC’s mandate to regulate these activities.

This Consultation Paper discusses the merits of extending ASIC’s regulatory oversight of insurance claims handling and seeks feedback on two options that have been identified for achieving this.

Submissions

No submissions are currently available.