ASIC Outlines Ongoing Focus on Life Insurance

Life insurance will be an area of particular focus for ASIC over the next 18 months with direct sales, TPD claims and the investigation practices of life insurers to be reviewed by the regulator.

Releasing its Corporate Plan for the next five years, ASIC outlined the key areas of focus over that longer time period, and during 2017 and 2018, with life insurance being a core issue in its work in the financial services sector.

ASIC stated it was preparing to collect data for a future review of the Life Insurance Framework reforms but would also examine the investigation and surveillance practices of insurers when assessing potentially fraudulent claims, and addressing unfair and unreasonable practices.

Ongoing projects that would continue include looking into the culture and conduct of life insurance direct sales and distribution, the practices around TPD claims, and the incidence of declined or withdrawn claims following the release last year of Report 498 which examined life insurance claims.

Advisers with a higher likelihood of providing non-compliant advice would also come under scrutiny and be identifed through life insurers’ exception reports available to ASIC through its data gathering processes introduced under the LIF reforms.

ASIC would also be continuing its compliance monitoring of financial advisers and advice within larger, institutionally aligned advice groups which has been ongoing since 2015. This work would include targeted surveillance of advisers identified from previous reviews as having a high risk of non-compliance and monitoring programs for remediating consumers who received non-compliant advice.