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The Federal Government’s novel approach to tackling housing insurance affordability issues in North Queensland continued this week with the unveiling of ASIC’s home insurance comparison website. Replete with disclaimers and emphasising product features over policy price, the website is intended to aid consumer understanding and decrease underinsurance in a market struggling under flood and wind exposure. The website is one pillar of the Government’s response to a perceived insurance crisis in the region; the other…
On 19 February 2015, we reported on ASIC enforcement actions in the second half of 2014. ASIC has since updated its regulatory guidance on enforceable undertakings (RG 100).  The updated guidance will apply to enforceable undertakings accepted by ASIC from 9 March 2015. The changes made to the guidance centre primarily around the engagement of experts to report on compliance with enforceable undertakings. The guidance details the circumstances in which ASIC will seek to appoint…
ASIC has recently released its quarterly enforcement report detailing enforcement outcomes between 1 July 2014 and 31 December 2014.  The report addresses the range of criminal and civil action taken by the regulator, and highlights action taken against companies and directors resulting in criminal charges which were most significant during the period. In addition, significant civil penalties were also handed down to financial services licencees and there are a number of issues worth highlighting to…
The FSI referred to studies undertaken after natural disasters revealing inadvertent underinsurance due to consumers struggling to make an informed decision about the sum insured.  Survey results highlight that even when consumers take the time to read insurance documentation, including the product disclosure statement, many misunderstand it, scan it briefly due to over-reliance on sales staff, or fail to understand it due to its complexity.  By way of example, a survey by Caxton Legal Centre…
The FSI shares concerns raised by ASIC that consumers are buying products that do not match their needs. The existing regulatory framework relies heavily on disclosure, financial advice and financial literacy. However, disclosure can be ineffective for a number of reasons, such as complexity of documents and misaligned interests. The FSI also considers that current industry-led standards have not been sufficient by themselves to address serious conduct issues. According to the FSI, product issuers and…