(Re)Insurance and Regulation Focus - fortnight commencing 17 February 2025

Key developments over the last fortnight

“People are paying too much for their insurance”: Dutton flags potential intervention in insurance industry by coalition government

In an interview with Sky News on Sunday 16 February, Opposition Leader Peter Dutton raised the prospect of applying its divestiture policy to large insurers to combat issues such as premium increases and the inability of property owners in known flood risk areas to access insurance cover. Andrew Hall, CEO of Insurance Council of Australia has responded with initial comments on Monday morning acknowledging the affordability and availability challenges in the Australian insurance market notwithstanding the 30 companies in Australia offering home and contents insurance as weather-related incidents continue to put increasing pressure on premiums. With flood risk expected to increase exponentially, this issue is set to remain central in the public agenda.

Uncertainty around ASIC’s voluntary disclosure regime clarified in new Federal Court ruling

ASIC has successfully appealed the Federal Court’s findings in ASIC v Noumi that disclosing privileged reports to ASIC under the voluntary disclosure regime (by way of a voluntary disclosure agreement) amounted to the waiver of any valid legal professional privilege (LPP). However, significant consideration should be given to both the document to be disclosed and the surrounding circumstances in which the disclosure is to be made to ensure that LPP is maintained. In comments from Deputy Chair Sarah Court, ASIC has confirmed their expectation that the “decision will remove uncertainty for parties considering whether to enter into such agreements with ASIC in the future.”

Judgment Template

Ongoing concern in ASIC about provision of advice

ASIC Commissioner Alan Kirkland has commented on continuing examples of “poor, if not devastating” consumer outcomes as a result of the provision of advice continuing throughout the market, citing predatory sales tactics deployed by telemarketers as a common example. In a clear warning to all entities involved in conduct causing harm to consumers, including advisers and licensees, Kirkland raised the significance of two its longer term strategic priorities to this issue, namely to ‘improve consumer outcomes’ and ‘better retirement outcomes and member services’ along with the application of its enforcement priorities - promising a sustained focus on advice-related misconduct. Everyone in the financial advice chain should therefore seek to ensure their compliance programs are adequate and up to the standard expected by ASIC as soon as possible.

The complex challenge of advice | ASIC

Key dates on the horizon

• 22 February 2025 – Financial Accountability Regime register of accountable persons submission period closes for enhanced reporting entities.
• 28 February 2025 – Attorney General’s Review of the use of legal professional privilege in Commonwealth investigations consultations process closes.
• 15 March 2025 – the (fast approaching) Financial Accountability Regime commencement date for insurers and superannuation entities.
• 1 July 2025 – APRA prudential Standard CPS 230 commences.

In case you missed it

The Sparke Helmore team presented targeted responsible manager training that addressed the multitude of requirements that apply to responsible managers across the industry, including as regards data and cyber risk. Let us know if you would like to hear more.