Life/risk advisers who have been identified as having higher lapse rates have already been the subject of scrutiny by the Australian Securities and Investments Commission (ASIC).
ASIC deputy chairman, Peter Kell has told the Actuaries Institute that the regulator has already leveraged the data it has collected from life insurers identifying advisers with higher lapse rates than the industry average.
“We are now well into follow up work in this space,” Kell said in reference to the adviser life insurance channel.
“This includes the collection of data on higher lapse rates from insurers to help identify potentially higher risk advisers,” he said. “We have already achieved several enforcement actions against advisers as a result of this work.”
Kell’s comments came as both he and ASIC’s new chairman, James Shipton sought to defend ASIC’s role in the context of issues which had been raised at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Like Shipton, Kell claimed that many of the instances of misconduct that had been examined by the Royal Commission had been the subject of ASIC investigations and regulatory outcomes.
“The importance of addressing these concerns has been underlined by the Royal Commission,” he said.
“The Royal Commission is also highlighting the importance of community expectations and community standards,” Kell said. “We have seen that an approach based on minimal or technical compliance with the law has, at times, been allowed to override fairness and good consumer outcomes. This will only undermine trust.”
