The Australian Securities and Investments Commission (ASIC) is concerned about sales of life insurance by so-called direct insurers.
The regulator’s concern has been directed at the policies being sold through extensive media campaigns on daytime television.
Commissioner Peter Kell told the Financial Services Council conference on the Gold Coast last week that ASIC is now working with the Australian Prudential Regulation Authority on issues related to direct insurance, “and we will be proactive in this sector”.
“We need to identify the problems before they blow up.”
Mr Kell says one of the challenges for ASIC is how to regulate marketing and advertising by direct insurers to avoid misleading claims.
“The high discontinuance rates in direct insurance is also a concern,” he said.