(Re)Insurance and Regulation Focus - fortnight commencing 1 September 2025
02 September 2025
Key developments in the last fortnight
APRA 2025-2026 Corporate Plan announced
APRA has published its latest corporate plan outlining its strategic priorities for the next four years. The plan also covers APRA’s policy, supervision and data priorities for the coming 12 to 18 months. There are four strategic objectives stated in the plan, namely 'maintaining financial and operational resilience; responding to significant and emerging risks; getting the regulatory balance right; and improving APRA’s organisational effectiveness'. Top priorities also include strengthening cyber resilience across industry, assessing compliance with CPS 230, and updating governance prudential standards. APRA Chair John Lonsdale used the announcement to state that a 'strong and stable financial system is an essential prerequisite for economic growth' and that 'APRA will continue to focus on ensuring banks, insurers and superannuation trustees have the financial and operational resilience to withstand a sudden shock and continue delivering vital financial services to their customers.'
Life insurers directed to improve direct sales practices
ASIC has used a letter to industry outlining concerns about direct sales practices to call on life companies to strengthen product design, improve sales and pay practices, apply consistent quality standards to retention calls and cancellation practices and to treat complaints as business intelligence. Specifically with respect to life insurance products ASIC Commissioner Alan Kirkland noted that 'it is typically a complex and costly product, so it is important that sales practices are designed with customers’ needs in mind' and called on life companies to 'place the customer at the very heart of their product and service proposition, including by using customer feedback and complaints data to respond to pain points.' Whilst these comments (and the associated letter) were directed specifically at life insurance companies, all ASIC regulated entities should take note of these calls, as it is likely that ASIC will expect similar actions be taken across the whole industry.
ASIC urges life insurers to spearhead improvements to direct sales practices
TerraCom pays the price for actions against whistleblowers
ASIC will be touting their first enforcement outcome for contraventions of whistleblower provisions as a resounding success following TerraCom being ordered to pay a $7.5 million penalty for whistleblower victimisation. The allegations related to two ASX announcements made by TerraCom, and an open letter it published to shareholders in the Australian Financial Review and The Australian, which stated that allegations made by the whistleblower were false, and that TerraCom had the conduct of its employees independently investigated. TerraCom admitted that those announcements caused detriment to the whistleblower in the form of hurt, humiliation, distress and embarrassment, and that it damaged the reputation of the whistleblower by representing him as someone willing to make unfounded accusations for personal gain in circumstances where an independent investigation at least partially supported his allegations. This $7.5 million penalty (plus an order to pay ASIC’s legal costs of $1 million) should serve as a salient reminder of the importance of complying with the whistleblower protections.
TerraCom to pay $7.5 million after ASIC whistleblower action
Incidental retail cover legislative instrument remade
(In what we are sure is good news for insurers and brokers) ASIC has remade a legislative instrument that exempts insurers and brokers from certain retail client obligations under the Corporations Act, specifically when incidental retail cover is provided in wholesale insurance contracts. The legislative instrument was scheduled to end on 16 August and was extended on 13 August for a period of five years. ASIC determined that the instrument was generally operating effectively and efficiently and continued to form a necessary and useful part of the legislative framework. The intention of this relief is to reduce regulatory burden and provide certainty for industry that retail client obligations do not apply to business insurance products that incidentally include retail cover.
ASIC remakes incidental retail cover legislative instrument
Key dates
- 5 September 2025 – ASIC consultation on proposed updates to Regulatory Guide 181 Licensing: Managing conflicts of interest closes.
- 5 September 2025 - APRA consultation on enhancements to the insurance statistical publications closes.
- 22 September 2025 – APRA consultation on proposed minor amendments to the prudential and reporting framework closes.
In case you missed it
Sparke Helmore was nominated as a finalist for Professional Services Firm of the Year award at this year’s Australian Insurance Industry Awards. Whilst we were unsuccessful on the night, we were grateful to have been recognised.
