Life/risk advisers ran into a brick wall when trying to utilise Freedom of Information Act (FOI Act) provisions to discover how the Australian Securities and Investments Commission (ASIC) developed its Report 413, widely regarded as a key precursor to the introduction of the Life Insurance Framework (LIF).
On the eve of today’s Money Management Risk Breakfast in Sydney, the publication was provided with a copy of the ASIC correspondence refusing access to documentation relating to Report 413.
However, what that correspondence confirms is that the regulator developed a Surveillance Plan for a “Life Insurance Churn Project” in November 2013, and that it also developed a Project Plan for “Life insurance churn policy component of life insurance”.
According to the ASIC correspondence obtained by Money Management, each of the documents identified by regulator as pertaining to Report 413 were deemed to be “exempt” and could therefore not be released.
Among the reasons given by the ASIC officer handling the case was that she was satisfied that the release of the documents “would identify how ASIC gathers intelligence, the assessment procedure that ASIC applies, and how ASIC detects and selects matters requiring further surveillance or investigation”.
“If people become aware of ASIC methods and procedures used for preventing, detecting or dealing with breaches or evasions of the law, those methods and procedures will no longer be effective,” the ASIC official said. “The release of this material would provide forewarning of the considerations used by ASIC to assess information and of ASIC’s regulatory response.”
The ASIC correspondence finished on the note: “On balance, I find that disclosure of the conditionally exempt documents would be contrary to the public interest. The public benefit that lies in disclosure is outweighed by the adverse effects of ASIC’s operational activities. I find, therefore, that these documents are exempt from release.”
The good news for the life/risk advisers who sought the documents is that the officer decided not to impose processing charges related to their FOI request.
Comments
You wouldnt need to be James Bond to work out how they do their survellience, who do they think they are ASIO?This is just laughable really, once again it shows there wasnt any real concrete evidence of churn actually being a major issue in the industry, , hiding this information just proves there is something to hide! .
ASIC has no problem keeping their methods secret as a matter of security.
Yet they conducted and condemned the financial planning industry for churning, only to find a very small number of people were actually guilty.
They obviously run by a flawed model and are afraid to expose their failure methods as indicated by the results.
If a motor company sent out flawed vehicles it would require a recall worth many millions.
But not so ASIC who can cast aspersions over self-employed people who are expected to carry so many personal and financial burdens, only to be trashed by a government agency.
To add insult to injury, advisers will now need to pay to support this very same agency to kill their businesses.
ASIC are being given even more powers to control so many other aspects of compliance. Looks like secret police!
"Methods secret as a matter of security"!! This is the worst kept industry secret!
ASIC went to the companies and asked for a list of their biggest lapsers and targeted them to create a fictitious report 413 for the sole reason of getting more funding and they got it.
ASIC admitted they got it wrong after the LIF was passed and after they got their extra funding.
Of course they are going to try and avoid releasing the truth because they acted like crooks and the FSC have not behaved any better.
Because of their actions underinsurance will worsen due to wiping out risk advisers and less claims will be paid due to customers being forced into junk direct insurance.
ASIC and the FSC need to be investigated over this.
Would be better for all concerned if ASIC came clean and admitted their mistakes while they can
The noose is tightening and the consequences about to become even more serious
This won't go away and is about to get a lot worse for those responsible
Good honest reporting MM !
Neither the FSC, ASIC, John Trowbridge, Consumer Action Law Society, David Whiteley or Kelly O'Dwyer have ever been able to clearly and concisely demonstrate or articulate the identifiable consumer benefits that supposedly will result from the implementation of LIF. I don't mean simplistic, repetitive statements, I mean documented, tested and proven data over time that provide a meaningful basis for change if necessary.
And yet, here we have ASIC stating that if their processes were released, it would not serve the best interests of the public...ie, consumer.
So, if we are unable to examine ASIC's processes and their methods of information gathering and intelligence, then how are we to know these are in fact in the best interest of the public ?
For all we know, the processes utilised and the determinations that ASIC arrive at may well not be in the public's best interest ! The publicly funded regulator, may actually be working against the public's best interest.
It seems like a case of KAOS versus Control and the Cone of Silence is well and truly in use !!
Correct Agent 86, there is no fundamental reason why ASIC should keep secret t 'how ASIC gathers intelligence, the assessment procedure that ASIC applies etc' In fact, disclosing this and proving (doubtful) that they have a robust system in place would provide certainty and dispel the widely held belief that they are utterly incompetent, flawed, biased and corrupt... But then covering up and non-disclosure only reaffirms those beliefs. Surely there is a higher power or adjudicator that can be appealed to for FOI when it is blatantly clear that the organisation in question is equivocating?
Yes Minister!
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