ASIC to launch industry-wide probe into life insurance
Following the CommInsure scandal, ASIC has said it will launch a wider investigation into claims handling across the life insurance sector to determine whether similar problems exist elsewhere.
Addressing the Parliamentary Joint Committee on Corporations and Financial Services yesterday, ASIC deputy chair Peter Kell said the corporate regulator was asked by Assistant Treasurer Kelly O'Dwyer to investigate the allegations against CommIssure.
She also requested that ASIC conduct a broader review of the life insurance industry to uncover any other systemic issues, Mr Kell said.
"The aim of our review is to determine whether there are indicators of systemic problems in claims handling across the life insurance sector. We want to, at this stage, undertake a review that is not going to extend over a long period of time," he said.
"We want to be able to undertake that initial review within a few months to get that first indication of whether there will then need to be some more in-depth examinations."
As part of the industry review, Mr Kell said ASIC will be working with APRA, the Financial Ombudsman Service and the Superannuation Complaints Tribunal as well as with the life companies individually.
"We will be using information sources to help establish whether there are red flags or warning signals," he said.
As for CommInusre, Mr Kell said that probe has already begun, with ASIC requesting information around its policies. He added that ASIC will want an independent review of CommInsure's files and data management.
"We have a focus as well on ensuring that there is a review of relevant client files, claims and that is something that is a priority for us," Mr Kell said.
"So it is early days but there will be a thorough investigation."
Mr Kell said the regulator will be looking at any bonuses or incentives within CommInsure that might have led to the purported behaviour.
"It's important in this matter," he said.
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