The Australian Securities and Investments Commission (ASIC) has formally revealed the underlying processes for its review of the Life Insurance Framework.
Answers to questions on notice from the House of Representatives Standing Committee on Economics has seen the regulator detail its approach.
It said ASIC will review two randomly selected samples of personal life insurance advice files, one sample of files from 2017 before the LIF reforms were introduced and one sample of files from 2021 after the LIF reforms are fully phased in.
“The advice files will be assessed for compliance with the ‘best interest duty and related obligations’,” it said. “The results will show whether the quality of life insurance advice has improved since the LIF reforms were introduced.”
The regulator said it was also collecting aggregate level data from life insurers every six months, covering the period from 2017 to 2021.
“ASIC will use this data to assess compliance with the law (i.e. compliance with commission caps and clawbacks) and to observe industry-level trends since the introduction of the LIF reforms. ASIC will publicly release the findings of the LIF review in late 2022 and will provide Government a copy of the report prior to its release.”
