(Re)Insurance and Regulation Focus - fortnight commencing 30 March 2026
31 March 2026
Key developments in the last fortnight
APRA stress test highlights growing home insurance gap
APRA has released its Insurance Climate Vulnerability Assessment, a prudential stress test exploring how Australia’s changing climate could impact home insurance affordability, and the insurance protection gap. Approximately one in seven Australian houses are uninsured today, with that figure expected to rise as high as one in four by 2050, disproportionally affecting rural areas. This widening protection gap could increase uninsured losses for households, heighten credit risk for banks, and coupled with increasing climate risk-related factors, impact premium affordability, further constraining growth in the home insurance market. APRA warns these pressures could erode the resilience of Australia’s financial system, urging all stakeholders to work together to reduce exposure to climate-related risks.
ASIC updates Product Disclosure Statement framework for strata insurers
On 10 March 2026, ASIC modified how Part 7.9 of the Corporations Act 2001 (Cth) applies to strata title co-insurance. This amendment grants relief where two or more insurers participate in a single strata home building policy, allowing for a single Product Disclosure Statement (PDS) to be issued to a retail client by a designated lead insurer, provided that a supplementary PDS is prepared which specifies the name and contact details of each following insurer, and their participating share(s) as set out in the co-insurance agreement. Previously, each insurer in a co-insured structure is required to prepare its own PDS in certain conditions as set out in the Corporations Act. Separately, ASIC has updated Regulatory Guide 168: Product Disclosure Statements: Disclosure and other obligations and Regulatory Guide 221: Facilitating digital financial services disclosures to consolidate PDS guidance and clarify digital disclosure requirements, respectively.
ASIC updates Product Disclosure Statement framework for strata insurers | Insurance Business
ASIC launches financial complaints data dashboard
On 18 March 2026, ASIC launched an Internal Dispute Resolution (IDR) dashboard which enabled users to compare the complaints reported by individual financial firms, providing greater transparency and valuable insights into complaints volumes and trends. ASIC Commissioner Alan Kirkland emphasised that the platform ‘…provides a birds-eye view of how the Australian financial sector handles complaints…’. ASIC previously launched a Reportable Situations dashboard in October 2025, which contains information about financial services and credit licensees’ self-reported breaches. Australia’s current IDR regime requires certain financial firms to report all complaints received through their IDR processes, and while ASIC has previously published firm-level information, this dashboard reflects ASIC’s foreshadowed intention to provide more granular data in an easily-accessible format.
26-051MR ASIC launches financial complaints data dashboard | ASIC
AFCA publishes updated Rules and Operational Guidelines
AFCA has published its updated Rules and Operational Guidelines (OGs) with effect from 12 March 2026. The updated OGs include the expansion of AFCA’s jurisdiction which enables it to investigate scam-related complaints involving receiving banks and unauthorised accounts opened by scammers in a complainant’s name, and a new rule to enable AFCA to publish the names of financial firms who fail to comply with its determinations, among other updates.
Treasury announces education overhaul for life insurers and other financial advisers
In a consultation paper released on 17 March 2026, Treasury announced a proposed overhaul of education requirements for life insurers and other financial advisers. The new qualification standard contains the requirements of a bachelor’s degree or higher, four financial concept subjects and four accredited financial advice subjects. These reforms aim to simplify the requirements for financial advisers which were criticised as complex, inflexible, and unattractive to school-leavers and career-changers, contributing to a decline in new entrants to the profession. This paper follows a period of the life insurance industry advocating and consulting with Treasury for a new class of adviser providing ‘simple advice’ to improve the accessibility and affordability of financial advice. Further, a report released by the Council of Australian Life Insurers (CALI) revealed that three in five people would trust financial advice received from AI programs, a concerning development which these reforms aim to address.
Adviser education reforms aim to clear path for new entrants - Insurance News - insurancenews.com.au
Resilience investment guide
The Commonwealth Government has released details of guiding principles for resilience investment, developed in consultation with insurers through the Hazards Insurance Partnership. Following a meeting on 13 March 2026, and previous discussions regarding premium affordability, insurers are urged to prioritise investment in both resilience and mitigation measures which will have the greatest material impact on reducing the risk and impacts of Australia’s increasingly extreme weather events. Such investments include flood levees, cyclone-resistant building standards, and bushfire-proofing measures which will protect communities, insureds, and the insurance system in the face of ever-increasing climate risks.
Resilience investment guide targets affordability challenge - Insurance News - insurancenews.com.au
Strata Commissions Review Report
In a recent report published March 2026, the NSW Productivity and Equality Commissioner has recommended abolishing commissions for strata managers and restricting payments to intermediaries (including insurance brokers) in an effort to increase fairness and transparency in the sector. The Commission found that the current disclosure-based regulation was not effective and had failed to have a meaningful impact on consumer knowledge. The Commissioner emphasised that while percentage-based commissions are legal, such arrangements create an unavoidable conflict of interest which unfairly and unreasonably increase costs for owners. The NSW Government has stated that they will now carefully consider the report’s findings and recommendations.
Strata Commissions Review | NSW Government
Key dates
- 31 March 2026 – Enrolment opens for AML/CTF tranche 2 entities.
- 17 April 2026 – Treasury’s consultation closes on education reform for financial advisers.
- 1 July 2026 – AML/CTF obligations commence for tranche 2 entities.
- 1 July 2026 – Mandatory climate related financial reporting annual reporting period commences for Group 2 entities.
In case you missed it
The Financial Accountability Regime (FAR) commenced 15 March 2025 and has been in-force for over a year. The Sparke Helmore team has been advising on the application of FAR and compliance measures, including conducting FAR simulation exercises for Accountable Persons which adds value to FAR implementation. If this is of interest to you, please reach out and let us know.
