The corporate regulator has expressed concerns over direct insurance sales models offered through general advice arrangements.
Speaking before the Parliamentary Joint Committee on Corporations and Financial Services, Australian Securities and Investments Commission (ASIC) deputy chair Peter Kell said general advice regulation was allowing for questionable behaviour regarding direct insurance sales.
“One of our concerns is that, in some areas, we have seen pretty aggressive sales models occurring under general advice models,” Mr Kell said.
“Under personal advice, you get a range of additional protections. There are a range of additional obligations on the adviser that are not necessarily there under the general advice models.”
When asked by Queensland senator Chris Ketter to clarify what behaviour the regulator had seen under a general advice model as opposed to a personal one, Mr Kell said ASIC had seen “some pretty poor practices” under the general advice model.
“We are, of course, as I think the committee may be aware, undertaking a review at the moment of the direct insurance channel, which includes some general advice models,” he added.
“So in the second half of the year we will be in a position to report on what we find there around some of the issues that arise in relation to general advice, not just personal advice.”
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