The National Insurance Brokers Association has said ASIC’s review of life insurance advice is not substantial enough for the industry to take any relevant action.
In a submission to the Life Insurance and Advice Working Group – in response to the interim Trowbridge report – the NIBA said ASIC needs to conduct a more comprehensive review to better determine where the problems in risk advice actually lie.
“There is little information in the ASIC report as to who was providing the poor advice, and the circumstances in which poor advice was being provided,” the submission from the NIBA said.
“Before looking at possible options to address the concerns, we believe that it is necessary to develop a far better understanding of the facts, circumstances, pressures, incentives, directions and failures that led to the provision of poor advice.”
The NIBA also pointed out that until proper research and analysis is undertaken it would be “impossible” to determine realistic options for dealing with the problems.
“In addition to understanding the issues and the causes of the concerns that have been identified by ASIC, we believe that it is also necessary to review the current legislative, regulatory and self-regulatory frameworks,” the submission said.
“In other words, are the regulatory frameworks sufficient, does the legislation need to be enforced and applied in a more efficient and effective manner, is there a role for a more effective self-regulatory approach, does stronger leadership need to be provided by insurers and licensees,” it said.