Life Insurance Update – ASIC’s expectations and priorities October 2020

02 October 2020

Welcome to our update, bringing you the latest in Life Insurance news.

The COVID-19 pandemic has brought many challenges to the insurance and financial services industry this year. ASIC’s oversight of insurance and financial markets has been prominent and focused on ensuring consumer protection, genuine handling of insurance claims and safeguarding consumers against misconduct following the Royal Commission into Financial Services.

In this update, we summarise ASIC’s expectations and priorities affecting Life Insurance, and highlight the recurring message to life insurers regarding claims and complaints handling practices in light of existing Life Insurance Code of Practice (Code) commitments and ASIC’s expectations of the industry. We also touch upon the role of the Australian Financial Complaints Authority (AFCA) in light of claims and complaints handling, and its approaches to resolving financial complaints.

ASIC’s key priorities affecting Life Insurance

Following ASIC’s letter to life insurers of 27 April 2020 which detailed its expectations for the life insurance industry during the pandemic, five key priorities were identified in ASIC’s interim corporate plan (Interim Plan) of 11 June 2020 and in the August 2020 Corporate Plan. Each of these can be accessed by clicking here.

Some of the key priorities affecting life insurance and superannuation within ASIC’s corporate plans include:

  1. Engaging with AFCA to monitor poor claims and complaints handling processes;
  2. Monitoring the impact of the COVID-19 pandemic on the insurance offerings of superannuation trustees;
  3. Reviewing a sample of policy documents for insurance in superannuation and monitoring policy renegotiations;
  4. Monitoring claims processes and outcomes in the life and general insurance sectors to ensure consumers are not unfairly disadvantaged due to the effects of the COVID-19 pandemic on claims processes;
  5. Collecting data relating to COVID-19 claims when the immediate operational effects of the pandemic subside; and
  6. Use of ASIC’s regulatory tools, including enforcement action, to deter claims handling-related misconduct and ensure insurance claims are processed with utmost good faith.

ASIC’s September 2020 Enforcement Update

ASIC’s September 2020 Enforcement Update indicates that it remains committed and focused on regulatory endeavours and work priorities set out in the Interim Plan. This includes prioritising matters relating to misconduct within insurance and superannuation insurance, and implementation of pandemic-related enforcement priorities in response to misconduct relating to the pandemic. This includes mis-selling of unsuitable insurance and poor claims handling practices. Please click here for more information.

AFCA’s approaches to financial complaints

AFCA published in July 2020 a series of approaches to resolving financial disputes, including updates to some of these approaches. These apply broadly to various areas of financial disputes including life insurance, and provide useful insight into:

  1. AFCA’s approaches when dealing with issues concerning claims decisions;
  2. AFCA’s expectations on insurers with regard to evidentiary obligations; and
  3. What can be expected of complaint handling processes generally.

Please click here for further details.

This article was written by Matthew Harding, Partner, Sylvia Quang, Special Counsel and Thomas Dendrinos, Solicitor.


Subscribe to HWL Ebsworth Publications and Events

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us