Revamp Needed for Product Distribution, Urges ASIC
Revamp Needed for Product Distribution, Urges ASIC
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
The Australian Securities and Investments Commission (ASIC) has issued a stern reminder to issuers of insurance and other financial products, emphasizing the urgency to enhance their distribution practices to avoid violating compliance obligations.
Recent evaluations by the regulator unveiled significant weaknesses, including insufficient due diligence mechanisms for assessing and supervising third-party distributors, subpar consumer questionnaires, and a general lack of monitoring of consumer outcomes and product performance.
“This review offers an insight into how different industries and products are adhering to design and distribution obligations,†stated ASIC commissioner Alan Kirkland. “Where improvements can be made, we expect issuers and distributors to scrutinize the reports and elevate their distribution approaches.â€
From October last year up until last month, ASIC's review covered 19 product issuers, including providers of funeral and accident insurance. The examination revealed persistent issues, particularly in funeral and accident insurance, where consumers still received quotes despite being outside the intended target market based on "knockout" question responses. Moreover, consumer questionnaires often only inquired about age, an eligibility criterion, without addressing critical affordability concerns.
Under the design and distribution obligations regime implemented since October 2021, financial product issuers are mandated to ensure their products are designed for and marketed to the correct target audience. This involves creating a target market determination statement for each product, outlining its appropriateness for the intended consumers and ensuring distribution conditions align with this target market.
“ASIC is particularly focused on fostering adherence to the design and distribution obligations,†the regulator mentioned. “We are committed to regulatory actions where necessary and leveraging these obligations to enhance consumer outcomes.â€
Mr. Kirkland shared that ASIC has launched five civil proceedings related to these obligations, achieving three victories so far. Additionally, the commission has issued over 80 stop orders and published findings from seven reviews since the obligations came into effect.
Based on an article from Financial Services Online, it's clear that the current state of compliance in distribution need a proactive approach to better cater to the needs and protection of consumers. Taking heed of these regulatory insights will benefit both issuers and consumers in the long run.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
Fresh consumer attention on travel to the United States has again highlighted one of the clearest reasons Australians buy travel insurance: overseas medical costs can be severe, and the US is a destination where even a short hospital visit may become financially stressful. For travellers planning holidays, business trips, cruises that call at US ports, or family visits, the issue is less about whether to buy cover and more about whether the policy is strong enough for the trip. - read more
Recent consumer attention on complimentary credit card travel insurance is a timely reminder that 'included' does not always mean automatic, comprehensive or suitable for every trip. For many Australians, card-linked cover can be a useful benefit, particularly where it is backed by a reputable insurer and activated correctly. The risk is assuming it works like a standalone policy without checking the fine print. - read more
Canstar's latest travel insurance ratings have given Australian travellers another reminder that the cheapest policy is not always the best fit for a trip. With international holidays, cruises, domestic breaks and multi-destination itineraries all carrying different risks, the latest assessment reinforces the importance of weighing price against the practical strength of the cover. - read more
Renewed flight disruption around Bali has put natural disaster cover back in focus for Australian travellers, after volcanic ash activity in Indonesia again showed how quickly a straightforward holiday can become a logistical and financial problem. When airlines delay, cancel or reroute services, travellers may face extra accommodation, meals, transport, missed tours and rearranged connections, often before they have a clear answer on what their insurer will pay. - read more
Recent consumer guidance has put cruise holidays back under the travel insurance microscope, with Australian travellers being reminded that a cruise is not always treated the same way as a standard land-based trip. While many people assume a general policy will automatically protect them once they board, cruise travel can involve its own conditions, limits and exclusions. - read more
The concept of travel in Australia inherently brings to mind sweeping landscapes, rugged coastlines, and vast outback adventures. For many Australians, the dream of traversing this scenic wonderland is often tempered by the cold reality of expenses, with accommodation often being a prominent budgetary concern. Yet, far from dimming the wanderlust, this challenge invites a more clever approach to journeying through the land Down Under. - read more
Travelling is an exciting adventure, but it comes with its own set of uncertainties. That's where travel insurance steps in, offering peace of mind by covering unforeseen expenses and emergencies. However, filing a travel insurance claim can sometimes be a daunting process. - read more
Single trip and annual travel insurance can both protect Australians against unexpected travel costs, but they work differently. This guide explains the key policy differences, including trip frequency, duration limits, destinations, pricing, exclusions and what to check before choosing cover. - read more
Welcome to our guide on travel insurance! Whether you're planning a domestic getaway or an international adventure, travel insurance is a crucial part of your trip preparation. It provides peace of mind by covering unexpected expenses like medical emergencies, trip cancellations, and lost luggage. For Australian travellers, it is particularly important given the distance and expense often involved in overseas trips. - read more
Pre-existing medical conditions can affect travel insurance eligibility, pricing, exclusions and claims. Australian travellers should understand disclosure, medical assessments and policy wording before choosing cover. - read more
Knowledgebase
Occupational Hazard: A risk associated with the nature of a particular occupation, which may affect insurance premiums.
No comments yet. Be the first to share your thoughts.