The corporate regulator is not seeking any changes to professional indemnity (PI) insurance requirements for advisers stating that ‘tinkering' would not deal with problems related to claims or disputes.
Speaking at the Money Management PI Insurance breakfast in Sydney this morning Australian Securities and Investments Commission (ASIC) deputy chair Peter Kell said "no amount of massaging or tightening of arrangements will deal with the problems" relating to adequate levels and costs of PI cover for advisers.
Kell also said that changing PI requirements would not deal with low levels of PI cover seen in some disputes heard by the Financial Ombudsman Service.
"There is no magic answer to limits of PI by tinkering with PI requirements. ASIC is not of view this will happen," Kell said.
He reiterated ASIC's support for a last reset compensation scheme that would only provide compensation when all other resources had been exhausted.
"Any compensation framework should not be viewed in isolation, but as part of broader set of improvements in the sector including reducing conflicts, having higher standards and better access to advice," Kell said.
"In our current submission to the Parliamentary Joint Commission we have suggested ways to improve advice and standards as well as further reforms being made to ASIC's licensing toolkit."
"ASIC view is that the entry level for licensing is too low and ability to take people out of industry is too hard. We are seeking the discretion to refuse a license if a manager or director has been part of past failure or does not have membership of an external dispute resolution scheme.
