Australia’s securities regulator is starting the year with some stern words for the insurance sector.
The Australian Securities and Investments Commission (ASIC) has reminded local insurers that recent reforms represent a “new chapter in the history of insurance in Australia.”
As of 1 January 2022, those handling claims and settling services are now required to hold an Australian Financial Services (AFS) licence under the Corporations Act 2001.
Consequently, ASIC reminded insurers that claimants are entitled to ask whether those providing assistance to them are licensed and that they need to show proof of that licence if it is requested.
According to the regulator, the reform “closes a regulatory gap and brings claims handling and settling into the fold as a financial service.”
Back in 2021, ASIC said that it received over 300 applications for a claims handling and settling service AFS licence authorisation.
Looking forward, the regulator said that it would continue to monitor claims outcomes across the sector.
“We will be ready to act if consumer harm is found to be caused by conduct associated with claims handling and settling,” ASIC said.
On the other side of the table, the regulator said that it is ready to work with the industry to “address any challenges they may face in the course of implementing these significant reforms.”
In addition to warning insurers to remain compliant with new reforms, ASIC also issued a reminder to consumers that summer is the peak season for both extreme weather events and property damage claims.
The regulator noted that this seasonal trend can sometimes invite bad actors, as well as bad weather.
“Be aware of unscrupulous operators – sometimes referred to as ‘storm chasers’ or ‘disaster chasers’ – who may seek to take advantage of the situation,” ASIC said.
“Remember, you are entitled to ask these people who they are acting for and whether they are licensed to provide assistance with handling claims. They should be able to show you proof that they are licensed.”
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