The Australian Securities and Investments Commission (ASIC) is set to review the professional indemnity insurance regime and how it is working in the financial planning space.
The regulator's review of the regime was announced by ASIC deputy chairman, Peter Kell, during a Money Management breakfast focused on the efficacy of the professional indemnity insurance regime and the operations of the Financial Ombudsman Service (FOS) on Thursday.
Kell told the breakfast that ASIC would be taking a closer look at PI in coming months in circumstances where it believed industry licensing standards were too low and needed to be raised.
He pointed out that the regulator had already indicated in its submission to the Financial Systems Inquiry that it believed an argument existed for the establishment of a last resort compensation and that professional indemnity insurance would then act to complement such a scheme.
The Financial Ombudsman Service chief ombudsman, Shane Tregellis had earlier told the breakfast that he believed that financial services product manufacturers should be required to contribute to the cost of such a last resort scheme, not just financial planning firms.
