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On 22 June 2015, the Australian Prudential Regulation Authority (APRA) released a letter to all Chief Executive Officers (CEOs) of general insurers, Level 2 insurance groups and life companies (collectively, the insurers) encouraging them to adopt better public disclosure practices for prudential matters. The current capital adequacy framework for insurers is based on a three pillar approach, the third pillar being disclosure requirements. APRA currently requires insurers to disclose to the public its capital base,…
The Australian Securities & Investments Commission (ASIC) has continued its campaign for improved disclosure by insurers and their agents – this time in the motor vehicle insurance sphere. On 26 February 2015, ASIC published a report that examines the operation of no-claims discount (NCD) schemes for motor vehicle insurance and concluded that the schemes do not operate in a way that consumers might reasonably expect. The NCD scheme is a prominent feature of many motor vehicle…
The FSI identified the need to better align the interests of financial services providers with those of consumers to ensure better consumer outcomes. The following strategies have been recommended to address some underlying issues: Raising standards of conduct and levels of professionalism: This aims to address concerns regarding organisational cultures that do not focus on consumer interests, which contributes to the lack of confidence and trust in the financial system. One suggested method of raising…