{"id":63788,"date":"2022-12-08T11:11:58","date_gmt":"2022-12-08T00:11:58","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=63788"},"modified":"2025-03-14T12:02:25","modified_gmt":"2025-03-14T01:02:25","slug":"apra-asic-read-riot-act-to-insurers-on-premium-increases","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2022\/12\/08\/apra-asic-read-riot-act-to-insurers-on-premium-increases\/","title":{"rendered":"APRA, ASIC Read Riot Act to Insurers on Premium Increases"},"content":{"rendered":"<div class=\"header row\">\n<div class=\"intro\">\n<h3>The regulators calling out issues around risk premium increases &#8211; citing complaints from consumers among other factors &#8211; is the clear winner of the Riskinfo Story of the Week&#8230;<\/h3>\n<\/div>\n<\/div>\n<p>APRA and ASIC have released an <a href=\"https:\/\/www.apra.gov.au\/sites\/default\/files\/2022-12\/Letter%20to%20CEOs%20of%20all%20life%20insurers%20and%20friendly%20societies%20%28life%20companies%29%20-%20Premium%20increases%20in%20the%20life%20insurance%20industry.pdf\" target=\"_blank\" rel=\"noopener\">open letter<\/a> to the CEOs of all retail life insurers &#8211; past and present &#8211; on serious concerns over the extent of premium increases on life insurance policies.<\/p>\n<p>Citing complaints from consumers and reportable situations from insurers in relation to premium increases in retail life insurance policies, the regulators have tabled their concerns that some life companies:<\/p>\n<ul>\n<li>Have not appropriately applied premium increases to retail life insurance policies, particularly level premium policies, in accordance with the policy terms; and\/or<\/li>\n<li>Have not acted in accordance with the reasonable expectations created through the relevant disclosure and marketing material<\/li>\n<\/ul>\n<p>The letter notes these concerns indicate that some life companies do not have effective systems, processes and controls in place to ensure:<\/p>\n<ul>\n<li>Clear and effective disclosure has taken, and continues to take, place<\/li>\n<li>That all premium changes are made in accordance with the applicable documents that form the contract between insurer and consumer<\/li>\n<li>That marketing material and other documents are not misleading<\/li>\n<li>Continued compliance with their legal obligations, including to act efficiently, honestly and fairly<\/li>\n<\/ul>\n<p>With regard to existing policies, including legacy products, the regulators request all life companies that write, or have written, retail life insurance policies to review past:<\/p>\n<ul>\n<li>Premium increases, including for legacy products, to ascertain whether increases or re-pricing decisions have been applied in accordance with the applicable policy terms; and<\/li>\n<li>Disclosure and marketing material to determine whether policyholders have been provided sufficient clarity about future premiums, including the way in which premiums may change over the life of the policy<\/li>\n<\/ul>\n<p>Looking to the future, the open letter notes life companies should:<\/p>\n<ul>\n<li>Consider the appropriateness and clarity of disclosures and marketing material as they relate to future premium increases<\/li>\n<li>Review existing product labels, considering the appropriateness of describing a product as \u2018level premium\u2019 if there is not a high degree of confidence around premium stability<\/li>\n<li>Consider how to manage the reasonable expectations of policyholders around premium increases in an ongoing manner<\/li>\n<\/ul>\n<p>Insurers have been &#8216;requested&#8217; to respond to ASIC by 31 March 2023, outlining:<\/p>\n<ul>\n<li>Any findings in relation to their review of past premium increases which may not have been applied in accordance with the applicable policy terms<\/li>\n<li>Disclosure and marketing material which may have misled policyholders about the premiums they would have to pay<\/li>\n<li>If any issues of concern were identified, what steps are planned to report, rectify and remedy these issues<\/li>\n<li>Their proposed actions to meet regulator expectations about the design of future product offerings<\/li>\n<\/ul>\n<p><a href=\"https:\/\/www.apra.gov.au\/sites\/default\/files\/2022-12\/Letter%20to%20CEOs%20of%20all%20life%20insurers%20and%20friendly%20societies%20%28life%20companies%29%20-%20Premium%20increases%20in%20the%20life%20insurance%20industry.pdf\" target=\"_blank\" rel=\"noopener\">Take this link<\/a> to read the open letter issued by ASIC and APRA today to all retail life insurers, both past and present, which was signed by <strong>Sean Carmody<\/strong>, APRA\u2019s Executive Director: Insurance Division and ASIC\u2019s Senior Executive Leader: Insurers Financial Services and Wealth, <strong>Rhys Bollen<\/strong>.<\/p>\n<p>The letter notes ASIC will arrange meetings to discuss individual responses in April-May 2023.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The regulators calling out issues around risk premium increases &#8211; citing complaints from consumers among other factors &#8211; is the clear winner of the Riskinfo Story of the Week&#8230; APRA and ASIC have released an open letter to the CEOs of all retail life insurers &#8211; past and present &#8211; on serious concerns over the [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":63793,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,8291],"tags":[],"class_list":{"0":"post-63788","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-compliance-regulation","8":"category-story-of-the-week"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/63788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=63788"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/63788\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/63793"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=63788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=63788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=63788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}