The Royal Commission (RC) final report and its recommendations have helped level the playing field for consumers against big banks and insurers, according to Maurice Blackburn Lawyers.
Although the recommendations did not aim to rewrite the frameworks underpinning the financial services and insurance industry, they were pivotal to re-balance the interests of consumers against financial institutions, said Maurice’s superannuation and insurance law principal, Josh Mennen.
“These recommendations will help to level the playing field by delivering much better negotiating power to consumers in the products and services they are paying for across a range of areas, including mortgage broking and insurance,” he said.
“We particularly welcome the call for an unfair contracts regime for life insurance as a major win for consumers.”
Mennen stressed it was important that consumers had confidence that if they entered into a life insurance policy in good faith this would not be avoided.
Similarly, the recommendation of enforceable code provisions with respect to the Life Insurance Code of Practice would serve the same purpose and help impose sanctions on any insurers who would breach the code.
Additionally, the firm welcomed the call to ban commissions for mortgage brokers, which often resulted in granting excessive unsustainable debt.
“Financial advisers have long been banned from collecting such commissions but somehow mortgage brokers have continued to ride the training commission gravy train with minimal scrutiny and this recommendation will help to ensure the law can now similarly catch up with respect to the mortgage broking industry,” Mennen added.
Finally, it should be acknowledged that this Royal Commission would not have happened or uncovered the many shocking stories it has without the significant contribution of whistleblowers, according to Maurice Blackburn.
“This inquiry has shown more than ever why strong whistleblower protections are crucial in Australia to clean-up corporate misconduct, and we continue to support reforms to deliver this including a reward scheme for those who speak out,” he said.