The Australian Securities and Investments Commission has moved to work with financial services licensees to oversee the smooth introduction of the Government’s new regime requiring licensees to carry professional indemnity insurance cover.
The regulator’s announcement has come at the same time as an acknowledgement that “some practical limitations” exist.
In an announcement released this week, ASIC said it would be working with insurers, industry and consumers to achieve the Government’s objective of reducing the risk that licensees cannot meet retail clients’ claims for compensation because they do not have sufficient financial resources.
ASIC’s executive director of regulation Malcolm Rogers acknowledged there were some practical limitations in using professional indemnity insurance to achieve the Government’s objectives.
“We will use the consultation process to work through these issues and ensure our final policy takes account of practical issues for licensees and insurers,” he said.
