Two Labor MPs have supported calls from regulators for insurance companies to do better when it comes to add-on insurance sold by car dealerships.
The call comes in response to an ACCC announcement that insurance companies’ proposal to limit commissions on add-on insurance was anti-competitive and would not solve anti-consumer problems in the current market.
Further, ASIC raised concerns in a number of reports about the treatment of consumer by insurance companies when selling add-on insurance during the motor vehicle sales and finance processes, the MPs said in a statement.
Labor Senator Katy Gallagher said insurance companies are not doing themselves any favours by trying to make the minimum possible change.
“The evidence given in last week’s Senate estimates hearings show that there is more to do than simply cap commissions,” Ms Gallagher said.
“Labor stands ready, willing and able to work with ASIC, the ACCC, the government and insurance companies themselves to deliver better outcomes for consumer of add-on insurance products.”
Labor MP Tim Hammond also weighed in saying the corporate regulator has urged insurers “to reduce commissions paid to those who sell add-on insurance and the ACCC’s ruling does not prevent individual insurance companies from unilaterally lifting their game.”
“ASIC has also called on insurance companies to improve the design, targeting and value-for-money of their add-on products, move away from single upfront premiums, and provide refunds to consumers who were sold insurance policies in circumstances that were unfair,” Mr Hammond said.
Last month, the ACCC made a draft determination denying 16 insurers a cap on commissions on add-on insurance products, saying it was “unlikely to result in a public benefit”.
“This proposal doesn’t help to create an environment where consumers are in control and can benefit from effective competition. It is unlikely to address these market failures or improve the industry for consumers,” ACCC chairman Rod Sims said at the time.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 25 May 2018ASIC takes former AFSL director to courtBy Reporter
- 25 May 2018Henderson Maxwell owner launches investigationBy Aleks Vickovich
- 25 May 2018CBA issues update on AUSTRAC proceedingsBy Reporter
- 25 May 2018Employers granted unpaid super amnestyBy Jessica Yun
- 25 May 2018Bernardi backs bank withdrawal from wealthBy Aleks Vickovich
- 25 May 2018Adviser morale dips on tech frontBy Killian Plastow
- view all