General insurers and their issuing agents will need to move now to amend their call centre scripting to take advantage of PDS relief issued in the form of ASIC class order CO 11/842 issued on 28 October 2011.

This class order modifies the time for giving a PDS for a general insurance product when a retail client is given a quote for the policy during a solicited telephone call. It does not apply to unsolicited calls where the anti-hawking rules must be followed.[Read More]

Posted by Samantha O’Brien on Wednesday 02 Nov 2011

We have more on advice from ASIC - this time it's the results of an industry review on the advice practices of Australia’s 20 largest AFS licensees conducted in 2010, the focus of the review being around advice compliance systems.
 
ASIC Report 251 (PDF) publishes the results of the ‘self-reporting’ questionnaire phase of ASIC’s review of advice and sets out ASIC’s ‘good practice’ expectations. ASIC has set out some high-level recommendations for licensees and advisors in the report. Of these, the existence of conflicts inherent in most advice models (essentially remuneration-based conflicts) was highlighted  by ASIC. ‘Disclosure alone’ may not be enough to manage these conflicts. The FOFA reforms will have a significant impact in these areas for non-risk products.  
[Read More]

Posted by Samantha O’Brien on Friday 16 Sep 2011

In August 2011, ASIC released Report 245 (PDF) about its review of general insurance claims handling and dispute resolution processes. The review involved consideration by the regulator of claims handling and IDR statistics and documents from eight different general insurers, with a focus on key motor vehicle brands and markets. The report card for these insurers, and the industry generally, was good.
 
ASIC’s high level findings were ‘generally positive’. However, ASIC made nine general recommendations that should make their way through, were appropriate, to claims and dispute resolution practices and product disclosure content. These included recommendations about the role of ‘frontline’ (or call centre) staff in claims decision making, denials in particular, the provision of written responses to clients of complaint decisions made before stepping into the formal IDR stage and improved disclosure of no-claim discount scheme operation.
[Read More]

Posted by Samantha O’Brien on Friday 16 Sep 2011

On 30 August, ASIC embarked on a consultation process in relation to the advertising of financial products and advice services in Consultation Paper 167 (PDF). It is planned that this consultation will result in a regulatory guide on the issue, scheduled to be released in January 2012. 


After the completion of consultation, ASIC proposes to publish ‘good practice’ guidance to assist providers, promoters and publishers to present advertisements that are accurate and balanced. No doubt, this guidance will likely be a focus for marketing, legal and compliance teams in insurers and insurance brokers in the future. 


[Read More]
Posted by Samantha O’Brien on Friday 16 Sep 2011

Consumers want advice and insurers want to give it. Insurers have long asked for changes to the law, or guidance from the regulator, to reduce unnecessary legal hurdles to their provision of advice to clients about their own products.


In July, ASIC released Consultation Paper 164 (PDF) on scaling advice that will lead to regulatory guidance on this issue. Consultation is pending, but insurers, like others in financial advisory industries, will need to keep an eye on the FOFA reforms to assess its impact on scalability. The consultation paper includes some helpful examples that demonstrate the regulator’s distinction between factual information, general advice and personal advice.


With FOFA pending, the importance being able to ‘staying within the lines’ is likely to increase. The regulatory guide is timed for release in November this year.
 

[Read More]
Posted by Samantha O’Brien on Friday 16 Sep 2011