Nationals Senator John Williams has raised concerns with ASIC over the life insurance sector creating its own code of conduct, saying he had been told the draft code was "pretty weak".
During a Senate Economics Legislation Committee hearing yesterday, Mr Williams voiced concerns to the corporate regulator about the life insurance industry creating its own code of conduct.
While raising the issue, Mr Williams asked whether ASIC had received any feedback about the code of conduct - which is being developed by the FSC - pointing out that he had heard “it was pretty week”.
Responding to Mr Williams, ASIC deputy chair Peter Kell said it was “still early days” and the industry is working on its development.
“It is one of the elements that have been put forward to address the problems that ASIC and others have identified within the industry, and I still think it is in the consultation phase,” Mr Kell said.
“At this stage [the code of conduct] would be voluntary, but we have no indication at this stage from industry as to whether they may wish to seek ASIC approval of that code,” he said.
Mr Kell also added that if the code was not “robust” or led to the improvement of consumer outcomes then it is “not going to do anyone any good”.
The introduction of a code of conduct for the life sector was one of the requirements put forward within the Life Insurance Framework (LIF).
Yesterday Assistant Treasurer Kelly O’Dwyer introduced the LIF legislation into the House of Representatives, with the motion passing that the legislation be read a second time during the next sitting of parliament.
"I want to specifically acknowledge the work of the AFA, the FPA and the FSC in working together to achieve sensible reforms for the sector, which will benefit consumers through the provision of more appropriate advice and the long-term sustainability of the industry," Ms O'Dwyer said while introducing the bill.
“Consumers will benefit through improved quality of advice as a result of a better alignment of interests, more product choice and enhanced competition," she said.