An ASIC executive leader has said the CommInsure scandal is proof that meeting legal obligations is not enough for companies to ensure they are treating consumers fairly.
Speaking at the FSC Life Insurance Conference in Sydney yesterday, Michael Saadat, ASIC senior executive leader for deposit takers, credit and insurers, said while ASIC’s review into CommInsure found the group had used outdated definitions, this was not against the law.
“CommInsure did not breach the law when it came to its obligations. CommInsure is not alone when it comes to having outdated medical definitions in their policies,” he said.
“But clearly, that conduct is out of step with community expectations.”
Because of this, ASIC’s scrutiny of corporate culture stretches beyond legal obligations, Mr Saadat said.
He added that other areas the regulator is concentrating on include direct life insurance, which may have issues with misspelling, design and poor claims experiences.
“We’re looking at more than what you’re strictly required to do under your legal obligations because, as it has been shown, just meeting your legal obligations isn’t enough to ensure that consumers are getting good outcomes,” he said.
“Where we identify opportunities for good practice, we will certainly be putting out guidance.”
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