(Re)Insurance and Regulation Focus - fortnight commencing 4 August 2025

Key developments in the last fortnight

More in the Finder Wallet fiasco

The Full Federal Court has dismissed ASIC’s appeal in the Finder Wallet Case. The case concerns the Finder Earn product, being a crypto asset related product of Finder Wallet. ASIC argued the product was a financial product and that Finder Wallet’s dealings in the product were unlicensed financial services, amongst other breaches. The original case was dismissed by the Federal Court in March 2024 finding that the product was not a debenture, and therefore not a financial product, on the basis that there was no money 'deposited with or lent to' the respondent and there was no undertaking to repay that money as a debt. ASIC announced in April 2024 that it would be appealing the decision. In dismissing ASIC’s appeal, the Full Federal Court upheld the original decision that the product was not a debenture and therefore Finder Wallet had not breached the Corporations Act, as alleged by ASIC. ASIC has stated that it is 'carefully considering the decision and its implications'.

ASIC’s appeal against Finder Wallet Decision dismissed

Despite the Cyclone Reinsurance Pool resulting in lower premiums, affordability of insurance is still a concern

The ACCC’s fourth insurance monitoring report has indicated that medium to high cyclone risk areas are receiving lower premiums as a result of the Cyclone Reinsurance Pool. The ACCC noted that in these areas, largely north Western Australia and north Queensland, saw reductions of 11-15% for home and contents policies compared to premiums before the Cyclone Reinsurance Pool. Small business premiums in the same areas were found to have decreased by 24% in the same time. However, premiums in low and no risk areas increased by between 4-7%. This led the ACCC to conclude that the price of home and strata insurance across Australia is generally high and rising. The ACCC claims the reductions as a win stating that the primary goal of the Cyclone Reinsurance Pool was to reduce premiums in high risk areas. However, the ACCC has called on insurers to do more to incentivise and communicate about private risk mitigation.

Cyclone reinsurance pool lowering premiums in high risk areas but affordability concerns remain

'Forward together: Addressing misconduct in financial services'

ASIC Chair Joe Longo has made a keynote speech at the FSC Symposium 'Shaping Advice in a Time of Change' to highlight ASIC’s ongoing concerns about 'bad actors' trying to exploit the financial services system causing harm to consumers, which requires interventions from policymakers and regulators. ASIC states that it has launched consumer awareness campaign warning consumers of high-pressure sales tactics, clickbait advertising, and promises of better returns. ASIC will also take enforcement actions to scrutinise financial services licensees for misconduct and prevent consumer harm, including targets on poor financial advice as well as investment management conduct. Where misconduct is identified, ASIC will use its powers to issue stop orders, ban individuals involved and use the courts to preserve assets and limit travel of those bad actors. ASIC is determined to make the system better for consumers and encourage industry participants to join efforts to address these issues and regain a greater level of consumer trust.

Forward together: Addressing misconduct in financial services

AFCA releases complaints reporting for 2024-2025

Despite noting a 4% decline in complaints, AFCA is unhappy with the 100,754 complaints received in 2024–2025. AFCA Chief Ombudsman and Chief Executive Officer, David Locke, has said 'the movement is in the right direction, but receiving 100,000 complaints in a year is still unacceptably high' and called on financial firms to do more to ensure fair responses are being delivered before customers come to AFCA. The data has shown that general insurance complaints increased by 17%, with investments and advice complaints up 18% and life insurance complaints up 5%. Banking and finance and superannuation complaints saw decreases of 9% and 16% respectively over the same period. Mr Locke noted significant progress in scam related complaints with a reduction of 45%. Calling out motor vehicle insurance specifically, Mr Locke acknowledged that complaints are largely caused by industry wide parts shortages and a lack of skilled labour but stated that insurers should be doing more to effectively communicate these difficulties to customers.

AFCA receives more than 100,000 financial complaints in 2024-25

Cybersecurity failures result in ASIC lawsuit

ASIC has sued Fortnum Private Wealth Limited (Fortnum) for failures to manage and mitigate cybersecurity risks. ASIC claims that Fortnum has failed to meet is AFS Licensee obligations by failing to have adequate policies, frameworks, systems and controls in place to deal with cybersecurity risks. Fortnum had a cybersecurity policy from April 2021, which ASIC states was not adequate to manage cybersecurity risks, as several authorised representatives of Fortnum experienced cyber incidents, including one major breach resulting in the data of more than 9,000 clients published on the dark web. One of ASIC’s enforcement priorities targets failures of licensees to have adequate cybersecurity protections in place and this action should serve as a reminder to licensees about their obligations.

ASIC sues Fortnum Private Wealth for allegedly failing to adequately manage cybersecurity risks

AFCA consulting on general insurance claims handling approach

AFCA’s approach documents provide information on how complaints will be assessed and determined, including outlining how AFCA applies legal principles, industry codes and regulatory guidance. AFCA has announced that it is consulting on its approach to general insurance claims handling, which includes common complaint scenarios about claim delays, cash settlements and claim denials involving expert reports. Consultation is open until 29 August 2025 and is open to all stakeholders. AFCA expects to publish the final version of its new approach document in late 2025.

Consultation on AFCA's general insurance claims handling approach

Key dates

• 8 August 2025 - APRA consultation closes on minor updates to Private Health Insurance (Health Benefits Fund Enforcement) Rules 2015.
• 29 August 2025 – AFCA consultation closes on AFCA’s general insurance claims handling approach document.
• 1 September 2025 – ASIC consultation closes on proposed updates to Regulatory Guide 183 Approval of financial services sector codes of conduct.
• 5 September 2025 – ASIC consultation closes on proposed updates to Regulatory Guide 181 AFS licensing: Managing conflicts of interest.

In case you missed it

With the new mandatory climate reporting requirements coming into effect this year (and phasing in over the next two years), the Sparke Helmore team have been delivering a number of presentations on the obligations and compliance strategies for Australian organisations. If you need any advice or would like to discuss these reporting requirements, feel free to reach out to our team.