ASIC calls on insurance and super funds to address gaps before October deadline

By

August 03 2021
Share

Australia’s securities watchdog has said that the life insurance industry needs to step up when it comes to how it handles consumer data.

ASIC calls on insurance and super funds to address gaps before October deadline

Australia’s securities watchdog says that the life insurance industry needs to step up when it comes to how it handles consumer data.

As part of their regular check-in with Australia’s life insurance industry, ASIC said more needs to be done to address industry issues.

ASIC deputy chair Karen Chester said that while all nine insurers covered in the agency’s latest report are working to address issues raised by ASIC’s 2019 report, “more needs to be done”.

“Most insurers have conducted reviews to identify areas for improvement, and have started to make appreciable changes in response to ASIC’s findings and their own, to lift industry standards,” the report found.

The full list of companies who participated in the report includes Westpac, AMP, Metlife, AIA, Zurich, MLCL, TAL Life Ltd, Hannover and QInsure.

More specifically, Ms Chester called out the industry for inconsistencies when it comes to storing and using consumer data.

She noted that ASIC found that data captured by insurers is often “inconsistent or not in a searchable or reportable format, limiting its usefulness”.

According to her, “to achieve good customer outcomes, insurers must lift their data capabilities”.

“Insurers also need to invest more in their data systems to target claims-handling problems, and design products to meet the needs of their target market,” she added.

Ms Chester also noted that superannuation funds accounted for around 75 per cent of the total and permanent disability (TPD) insurance market, calling on superannuation trustees “to engage with TPD design issues and work on lifting standards, for the benefit of their members”.

“While some trustees have taken positive steps in this direction, others have more work to do,” she said.

ASIC’s 2019 review of the TPD sector highlighted four major issues in the industry, ranging from friction in the claims handling process, a higher-than-predicted declined claim rate, a lack of adequate data-keeping practices and the subjecting of claimants to ‘activities of daily living’ tests.

Ms Chester said that superannuation trustees are clearly in the “driver’s seat” when it comes to delivering good outcomes for customers, calling on them to deliver the improvements necessary to meet their design and distribution obligations by the October deadline.

“They also need to be mindful of their new obligations to act efficiently, honestly and fairly when handling claims and providing superannuation trustee services,” Ms Chester added.

In a statement, ASIC said it will continue to monitor progress and hold insurers accountable to their commitments.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

Most read

Age Pension increase prompts Australians to review their finances

Latest Podcast

Credit card use hits record high as Australians spend smarter

Resources

There is $17.5 billion in lost and unclaimed super across ...

Invest