Revamp Needed for Product Distribution, Urges ASIC
Revamp Needed for Product Distribution, Urges ASIC
3
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
The Australian Securities and Investments Commission (ASIC) has issued a stern reminder to issuers of insurance and other financial products, emphasizing the urgency to enhance their distribution practices to avoid violating compliance obligations.
Recent evaluations by the regulator unveiled significant weaknesses, including insufficient due diligence mechanisms for assessing and supervising third-party distributors, subpar consumer questionnaires, and a general lack of monitoring of consumer outcomes and product performance.
“This review offers an insight into how different industries and products are adhering to design and distribution obligations,” stated ASIC commissioner Alan Kirkland. “Where improvements can be made, we expect issuers and distributors to scrutinize the reports and elevate their distribution approaches.”
From October last year up until last month, ASIC's review covered 19 product issuers, including providers of funeral and accident insurance. The examination revealed persistent issues, particularly in funeral and accident insurance, where consumers still received quotes despite being outside the intended target market based on "knockout" question responses. Moreover, consumer questionnaires often only inquired about age, an eligibility criterion, without addressing critical affordability concerns.
Under the design and distribution obligations regime implemented since October 2021, financial product issuers are mandated to ensure their products are designed for and marketed to the correct target audience. This involves creating a target market determination statement for each product, outlining its appropriateness for the intended consumers and ensuring distribution conditions align with this target market.
“ASIC is particularly focused on fostering adherence to the design and distribution obligations,” the regulator mentioned. “We are committed to regulatory actions where necessary and leveraging these obligations to enhance consumer outcomes.”
Mr. Kirkland shared that ASIC has launched five civil proceedings related to these obligations, achieving three victories so far. Additionally, the commission has issued over 80 stop orders and published findings from seven reviews since the obligations came into effect.
Based on an article from Financial Services Online, it's clear that the current state of compliance in distribution need a proactive approach to better cater to the needs and protection of consumers. Taking heed of these regulatory insights will benefit both issuers and consumers in the long run.
In a significant move to bolster support for the marina industry, Pelagic Risk Services has elevated its sponsorship status from Silver to Gold with the Marina Industries Association (MIA). This advancement underscores Pelagic's dedication to enhancing the operational capabilities and risk management strategies of marina operators across Australia. - read more
Rhodian Group has announced the launch of Marinex Underwriting, a new agency dedicated to providing specialized marine insurance products tailored to the Australian market. This initiative marks Rhodian's third agency launch, following the establishment of Halo Underwriting and Batch Underwriting in previous years. - read more
In a significant development for Australia's marine insurance sector, Rhodian Group has announced the launch of Marinex Underwriting, a specialised agency dedicated to addressing the complex insurance needs of the marine industry. This initiative marks Rhodian's third agency launch, following the establishment of Halo Underwriting and Batch Underwriting in previous years. - read more
Markel Insurance has announced the appointment of Tim Wills as Head of Marine for Australia, signalling the company's strategic expansion into the Australian marine insurance market. Based in Sydney, Wills will spearhead the launch of Markel's marine products in the region, beginning with marine cargo insurance. - read more
As global trade dynamics undergo significant shifts, GT Insurance is reaffirming its commitment to supporting marine clients navigating these challenges. The recent imposition of US tariffs-25% on Australian steel and aluminium, and 10% on other exported goods-has introduced new uncertainties for local exporters, particularly in sectors like beef and bulk freight. These tariffs, effective from April 5, 2025, have prompted concerns about declining export volumes and reduced freight margins. - read more
Boat insurance policies are an essential requirement for boat owners in Australia. Understanding the different types of policies available, the level of cover provided by each policy, and the factors that can impact premiums, are all important steps when choosing the best insurance policy for your boat. - read more
Owning a boat comes with a wave of responsibilities, notably in the realm of maintenance. Regular maintenance plays a crucial role in ensuring the longevity and performance of your boat, much like adhering to a trusty roadmap for a long journey. Without it, not only may you encounter unwanted breakdowns, but the overall lifespan of your vessel could be significantly shortened. - read more
As boating enthusiasts, it's crucial to recognize the significant impact we have on our environment. Australia's beautiful waterways and marine life depend on our commitment to eco-friendly practices. - read more
Boating is a pastime enjoyed by millions around the globe, offering a unique blend of adventure, relaxation, and connection with nature. However, navigating the waters comes with its share of risks. Understanding the importance of safety on the waters cannot be overstated – it's not just about adhering to rules; it’s a pivotal aspect of responsible boat ownership and operation. - read more
In the bustling world of boating, eco-friendly practices are becoming increasingly popular among enthusiasts. Understanding what it means to adopt sustainable practices on the water is essential both for the health of our environment and for those who cherish nautical adventures. - read more
Knowledgebase
Insurance Deductible: the amount that an insured is required to contribute toward an insurance claim as stipulated in an insurance policy. Otherwise known as the "policy excess".
