The Australian Securities and Investment Commission (ASIC) is to investigate the conduct and disclosure behaviour of life agents as phase two of its review of the disability insurance market.
The Australian Securities and Investment Commission (ASIC) is to investigate the conduct and disclosure behaviour of life agents as phase two of its review of the disability insurance market.
Phase one of the campaign began in April when ASIC reviewed a number of life companies nationwide to gauge how well they were meeting their Life Code consumer protection obligations in relation to the distribution of disability products.
Phase two will be conducted by the National Compliance Unit (NCU) of ASIC. A selection of agents related to the companies inspected will be identified for onsite inspections which will be conducted across the country until July 2000.
Speaking at the Rice Kachor Distribution Seminar, ASIC national compliance officer Annette Donselaar said ASIC chose disability insurance as an area for review because it is a complex product; it represents almost 25 per cent of policies in force; and it receives the largest number of consumer complaints.
“However, we want to make it clear that we are not reviewing particular companies or agents because we have received complaints about them,” Donselaar said.
“We are reviewing them because they fit the parameters of the campaign.”
That said, Donselaar admitted that while the role of the NCU is compliance, not enforcement, breaches detected during the review would be referred to the relevant regional enforcement units.
“It would be remiss of us if we saw a breach of the Life Code and ignored it,” she said. “Clearly, if a problem is reported as part of the campaign, we will report it to the regional enforcement office who will follow it up.”
The agent review will consist of a questionnaire and file review, targeting the conduct and disclosure practices in relation to the sale of disability products.
ASIC hopes that the campaign will ultimately result in better understanding of consumer protection issues by both the industry and the public at large.
The final report is due in September and will be posted on the ASIC Web site (www.asic.gov.au).
