ASIC calls for insurance code enforcer

The Australian Securities and Investments Commission (ASIC) has made a direct call for a “properly resourced code administrator” covering insurance in superannuation the back of revealing the results of a shadow shopping exercise which found some superannuation falling short.

In a new report dealing with industry implementation of the Voluntary Code of Practice covering insurance inside superannuation, ASIC made clear that it, alone, could not do the job.

What is more, ASIC stressed the urgency of the situation by pointing out that the delivery of insurance inside superannuation was now costing more than the delivery of superannuation with premiums costing just over $5 billion a year compared to $3.8 billion for superannuation itself, including investment and administration costs accounting for $3.8 billion.

Related News:

Further, it said that the cost of insurance was rising at 21% a year – higher than either assets or combined investment and administration expense which had risen by 17% a year since 2014.

“Our work and engagement with the code is not a substitute for proper oversight of the code by a properly resourced code administrator that would have powers to investigate breaches and to sanction funds if breaches were not remedied,” the regulator said.

It did so on the back of a shadow shopping exercise which found that adopting of the code of conduct by superannuation funds has not been universal and that while two-thirds of funds had signed up, there was not always total commitment.

“… we found some signatories (13) have committed to only partial compliance with the code, and trustees’ anticipated timetables to full compliance varies widely,” it said.

ASIC’s reference to the need for a code-monitoring agency with the power to sanction comes as the Government moves to legislate to make the insurance inside superannuation code enforceable but has not yet indicated who will do the enforcing.

 




Recommended for you

Author

Comments

Comments

Hmm... yet ASIC's supervisory levy has tripled over the past year. More fees for no service. No opt in for them...

Shipton lead ASIC again demonstrating complete lack of understanding of insurance and investment fundamentals.

Codes and increased legislation are not going to solve anything - you need to start using all those extra tax payer funds and court awarded fines and penalties to start seeking and remunerating some industry risk specialists who actually understand Insurance and Superannuation and can do the job you have clearly demonstrated you're unable to do.

Try to understand WHY Insurance costs are increasing and WHY it costs more than administration of Superannuation - that should be a simple no-brainer to anyone with half a clue about the industry they're seeking to regulate and you should be embarrassed and ashamed of the actions and noise you are making. History will mark this period in Australian Finance as a blight and all happening on your watch.

Your left leaning socialist agenda is plain as day and will cause nothing but destruction and poorer and poorer outcomes for Australians.

Shape up or Shipton out.

Hmm, ASIC made the abobe comments about the cost of insurance, whilst the pool is getting smaller, no under 25's and limited underwriting, whilst placing pressure to pay TPD claims that dont meet stated definition? Who is this guy? Are they serious?

There are too many regulators & too many other hangers on & smart alex journalist/book writers, who wouldn't understand risk insurance if they fell over it.

Add new comment