(Re)Insurance and Regulation Focus - fortnight commencing 24 November 2025
26 November 2025
Key developments in the last fortnight
AFCA releases its latest dispute data through its Datacube
The latest data from AFCA shows that complaints against general insurers reached 22,351 in the 2024-25 financial year, up from 21,565 the previous year, with only 44% resolved at the referral stage and about 5% receiving no response. Home insurance and motor claims dominated the complaints by product type, at 36.85% and 35.13% respectively. The broker segment saw a jump in complaints to 788 (from 447), largely linked to historic add-on insurance products and only 13 going all the way to full decisions – 56% of those in favour of the complainants. Life insurers recorded 1,722 complaints (slightly down on last year), but only 27% of decisions were in favour of policyholders. The data shows the importance of robust complaint and claims-handling frameworks and suggests that insurers and brokers alike should focus on early resolution and transparency to minimise escalation.
Compliance costs back in APRA’s focus
At the Insurance Council of Australia (ICA) CEO roundtable on striking the right regulatory balance held on 30 October 2025, APRA Chair John Lonsdale called for a smarter balance in regulation to alleviate the burden of compliance costs through targeted changes to its prudential framework. Mr Lonsdale highlighted emerging risks including geopolitical risks and cyber threats, urging insurers to share insights on examples of how regulatory frameworks could be improved to support productivity. With the current regulatory burden is estimated to cost insurers and customers billions, the dialogue between regulators and industry is more critical than ever. Striking the right balance could free up capacity for innovation and improve sector productivity and affordability.
Insurance Council of Australia roundtable on striking the right regulatory balance
Optus cyber breach results in maximum penalty
Optus has been hit with an $826,320 penalty from the Australian Communications and Media Authority (ACMA) for serious failures in its identity-verification process which allowed scammers to hijack customers’ mobile numbers and siphon money from their bank accounts. The breach, which originated in software managed by a third-party supplier, demonstrates how critical strong vendor risk management is in today’s cyber-threat landscape. For risk and compliance leaders, it’s a stark warning that third-party controls must be treated as first-party risks.
Optus walloped with maximum possible fine after cyber breach
ASIC Deputy Chair outlines ASIC’s enforcement outlook
ASIC Deputy Chair Sarah Court’s speech at the ASIC Annual Forum highlighted ASIC’s accelerating enforcement actions, with more investigations, court actions and stronger outcomes. Ms Court emphasised that strong and active enforcement isn’t exclusively about being punitive, rather it’s about making the 'rules of the game' clear, leveling the playing field, and those that break the rules are to be held to account, which is critical to rebuilding trust in financial institutions. Ms Court highlighted how past court cases, including the RACQ pricing promises case, spurred industry-wide reforms, showing the real impact of visible enforcement. Ms Court ended with a firm commitment: ASIC will keep holding firms and individuals to account, driving better behaviour, integrity, and consumer protection. She also outlined ASIC’s enforcement priorities for 2025-2026 which were published the same day, including private credit misconduct, financial reporting failures, insurance complaints and claims handling, and misleading pricing practices.
The power and purpose of enforcement; ASIC announces 2026 enforcement priorities
APRA releases new report on financial system risks and vulnerabilities
APRA has launched a new report on its assessment of risks and vulnerabilities facing the Australian financial system. The new report, System Risk Outlook, will be published twice a year with a focus on increasing transparency around what is occurring in the domestic and international environments to inform APRA’s regulatory priorities. The first publication highlights the increasing risks from geopolitical environments and that this volatility is expected to continue for some time. APRA also sought to reassure the sector that they are closely watching the increasing domestic vulnerabilities driven by increasing debt and higher risk lending. Finally, APRA is concerned that the interconnectedness of the Australian financial system has increased the potential for shocks in one sector to cause impacts to the whole financial system.
APRA announces minor updates to the prudential framework
APRA has released its response to a consultation on proposed minor updates to the prudential framework in a letter to the industry. For general insurers this includes amendments to GPS 410 (Transfer and Amalgamation of Insurance Business for General Insurers) that remove the requirement for public inspection of documents in each State and Territory which the affected policyholders reside in, and the requirement to publish documents in newspapers and the Government Gazette. Additional changes include the retiring of CPG 233 (Pandemic Planning) and amendemnts to a number of health insurance standards relating to capital adequacy and insurance risk charges. Marked up versions of the amended standards are available on APRA’s website.
Minor updates to the prudential framework
ASIC Chair highlights need for regulation to support innovation
At a National Press Club Q&A, ASIC Chair Joe Longo emphasised that while innovation is welcomed, the regulatory framework must provide a clear foundation so firms can operate with confidence rather than inadvertently breaking the law. He also stressed that ASIC has become more active in enforcement and surveillance, doubling investigations and stepping into court to send a message that misconduct will have consequences. Finally, Mr Longo noted that culture, data-literacy and technological capability are critical for future regulatory success, both for financial sector firms and for ASIC itself, as financial markets evolve rapidly.
National Press Club Q&A – Joe Longo
Key dates
- 28 November 2025 – ASIC consultation on proposed changes to the Unclaimed Monies Gazette closes.
- 15 December 2025 – ASIC’s consultation closes on the Life Insurance Code of Practice review.
- 30 January 2026 – AFCA’s consultation closes on targeted adjustments to the general insurance reinsurance framework.
In case you missed it
The Sparke team have been conducting board level training for the upcoming mandatory sustainability reporting regime, with great success. If this is of interest to you, please reach out and let us know.
