ASIC admits its consultation process around its example life insurance statement of advice is “a different approach” to what it would normally take.
Speaking to the parliamentary joint committee inquiry into ASIC oversight, ASIC deputy chairman Peter Kell said the consultation process is “a genuine attempt to consult and start a conversation” about how it can improve the life insurance SOA.
He said ASIC deliberately took “a bit of a different approach” to what it would normally take on such matters.
“We asked a consultant to help us in looking at some behavioural work around how consumers actually digest that sort of information, how it can be presented to them in a way that it's going to make it easier for them to understand the advice and other issues around life insurance,” Mr Kell said.
“I suppose our starting point was that given there's a perception that these statements of advice have not necessarily been that useful for consumers. That's actually who they're supposed to work for, first and foremost.”
In regards to the length of the SOA, ASIC noted one of the behavioural insights was that key information needed to be situated in various places, and that “repetition is something that assists consumers’ understanding”.
Mr Kell said he was aware of the criticism the life insurance SOA has received from across the industry.
“That's fine from my perspective,” he said. “This is a genuine attempt to say, ‘Let's not try and do the same old thing. Let's look at what is actually going to work here for consumers’.
“We are very happy to receive even highly critical feedback saying we think it doesn't work in this area or in that area.”