The Federal Government has introduced new legislation to Parliament which addresses 20 recommendations and an additional commitment from the Hayne Royal Commission, with the intention to follow through on strengthening anti-hawking provisions and tougher enforcement on code breaches.
The reforms being introduced included:
- Strengthening the unsolicited selling (anti-hawking) provisions, including for superannuation and insurance products, to prevent pressure selling to consumers;
- Introducing a deferred sales model for add-on insurance products, to promote informed purchasing decisions and prevent inappropriate sales of add-on insurance;
- Making the handling and settlement of insurance claims “financial service”, which would require insurers to behave honestly, efficiently and fairly, and comply with other licensing obligations, to improve claims handling practices;
- Prohibiting the trustee of a superannuation fund from having a duty to act in the interests of another person, other than those arising from their duties as trustee of a superannuation fund; and
- Allowing provisions in financial services industry codes to be enforceable, with breaches attracting civil penalties, ensuring better adherence by industry and certainty for consumers.
Federal Treasurer, Josh Frydenberg, said consumers and small businesses would be further protected under the new changes.
“These changes will be complemented by providing further clarity regarding the role of the regulators and enhancing the requirements of financial institutions reporting breaches of the law which will ensure significant misconduct is reported and investigated sooner,” Frydenberg said.
“With the introduction of these recommendations, the Government is now focussed on completing implementation of the remaining recommendations of the Hayne Royal Commission consistent with the updated implementation roadmap issued following the onset of COVID-19.”