ASIC targets 'misleading pricing promises'

The Australian Securities and Investments Commission (ASIC) announced today it is stepping up surveillance of insurance pricing practices, after a number of insurers had to return millions of dollars in remediation over failures to deliver premium savings as promised.

ASIC says “misleading insurance pricing promises”, along with greenwashing and predatory lending, are its enforcement priorities for this year.

“We take our role to protect consumers and investors seriously and won’t hesitate to take action to protect consumers where we identify poor conduct,” Deputy Chair Sarah Court said.

‘We will also remain focused on helping industry to meet their legal obligations including by providing simple, effective and easy-to-access guidance.”

The regulator has previously flagged it would be looking more closely at insurers’ pricing actions after ordering general insurers to review their systems and risk controls.

ASIC’s other Deputy Chair Karen Chester told the House of Representatives Standing Committee on Economics in October last year that customer remediation over failures to deliver promised premium discounts have reached $760 million.

“This is a very recent activity. This is not something that was from the Hayne royal commission; this is recent conduct,” she said.

ASIC also published a regulatory developments timetable today, the first time that such a guide has been prepared for the financial services industry.

It says the timetable will help industry to better anticipate when ASIC will issue draft or final guidance, or the making of a legislative instrument.

According to the timetable, ASIC expects to issue a discussion paper on insurance recurrent data collection between now and March.

Meanwhile Australian Prudential Regulation Authority Chair John Lonsdale told a senate committee today that the regulator is focused on addressing insurance affordability and availability challenges.

“The urgency of this work in general insurance is brought into sharp focus with each severe weather event affecting an Australian community,” he said in his opening statement to the Senate Economics Legislation Committee.

“The problems are complex and solutions will be multi-faceted requiring a collaborative approach across industry, regulators, government and consumers.”

He says the prudential regulator’s work on climate risk will focus on the insurance sector this year.