The package, introduced on Thursday, has addressed 20 of the 76 final recommendations from the Hayne commission, as well as one additional comment.
The reforms have included tougher anti-hawking provisions for superannuation and insurance products to prevent pressure selling, prohibiting superannuation trustees from having a duty to act in the interests of a person other than those arising from their duties as a trustee and allowing provisions in financial services industry codes to be enforceable.
Breaches of industry codes could now attract civil penalties – with the government targeting better adherence to the standards and certainty for consumers.
The government has promised to provide further clarity on the role of the regulators, as well as enhance the requirements of reporting breaches from financial institutions, with the intention being to report and investigate significant misconduct sooner.
The package also included a deferred sales model for add-on insurance products, to promote informed purchasing decisions and prevent inappropriate sales, as well as defining the handling and settlement of insurance claims as a “financial service”, which will require insurers to comply with other licensing obligations. Insurers will also be expected to act honestly, efficiently and fairly under the law.
The Australian Banking Association (ABA) chief executive Anna Bligh reported that the industry is ready for the next round of the royal commission reforms, to come into effect from next year.
According to the body, the banks have fully implemented five of the eight Hayne recommendations which were directed at the industry to adopt, with progress being made on the remaining three.
Almost half (31) of the recommendations were relevant to banks, with 37 of the total 76 to be implemented by government and regulators.
“Banks have been partnered with the government during the pandemic to support customers and the economy and look forward to continuing that engagement as the royal commission legislation is considered,” Ms Bligh said.
A statement from Treasurer Josh Frydenberg said the government is focused on completing the implementation of the remaining Hayne commission recommendations, consistent with its updated roadmap following the onset of COVID.
I get the initial angst / frustration with this but isn’t the regulator simply asking existing advisers and licensees to prove their credentials in order to keep providing this important service?
One of the biggest justifications for trail insurance commission is the unknown and unquantifiable cost to administer a claim as well as the need for revisions on a policy over time.
Licensees will be forced to demonstrate how they resource and monitor the administration of claims and their authorised representatives will need to document their systems and procedures in this area.
The end result will be that those who dabble with insurance will quit it and those who specialise will have another proof point as to why you see a professional risk firm for insurance advice and claims.
I agree with the points others have raised about lawyers in this space – they should stay out of it until it becomes a legal dispute and if they want to participate earlier – get an Afsl and meet the obligations set by the regulator.
It is yet another move that indirectly harms the consumer by restricting access but for those already in the industry… less competition for skilled operators.
Has anyone read this?