FSC moves to reopen anti-churn framework
The Financial Services Council (FSC) is moving to reopen talks around the self-regulation of churn issues within the life/risk space in the face of a further letter from the Minister for Financial Services Bill Shorten and consultations with the Australian Securities and Investments Commission (ASIC).
FSC chief executive John Brogden has confirmed to Money Management that the FSC Life Insurance committee will be meeting on Friday to discuss the way forward and that contact will be made with the Australian Competition and Consumer Commission (ACCC) to ensure the appropriateness of a final approach.
The Minister for Financial Services Bill Shorten has used a letter to the FSC and the major insurers that he expects the industry to deliver on self-regulation and that ASIC “continues to consider excessive churn to be a genuine issue in this sector of the industry”.
“Consistent with my announcement, my preference is for a form of industry self-regulation in this area,” his letter said. “I look forward to your advice on the progress of the implementation of an industry anti-churn standard.”
Brogden said that as well as having received a letter from the minister, the FSC had met with ASIC and it had been made plain that the regulator would be focusing on the churn issue, both seeking data from the industry and undertaking surveillance.
The FSC chief executive said it was clear that in these circumstances the industry would be highly irresponsible if it did not address the issue and seek to create a framework for self-regulation rather than have the Government legislate the issue.
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