ASIC has said there is still “substantial work” to be done to clean up the sale of add-on insurance sold through car dealerships with more enforcement action being considered.
In 2016, add-on insurance, particularly policies sold through car dealerships, was put into the spotlight by ASIC with calls for a shake-up of the industry. Michael Saadat, an ASIC senior executive who oversees insurers, banks and credit, said that while some work had been done to address concerns, it remains a major focus for the regulator.
“ASIC has long been concerned about the sale tactics, very poor value of the product and commission structures of add-on insurance, especially as sold through car dealerships,” Saadat said, according to the
Australian Financial Review.
Saadat said that insurers are now being required to provide granular data on sales to ASIC, so that the regulator can place more scrutiny on the impact of consumers. While Saadat did not name any particular companies, he noted that the regulator is working alongside individual insurers to ensure that they remediate any consumers that were sold add-on insurance unfairly.
Browse and compare product listings for Auto insurance from specialty market providers here
“Enforcement action remains under active consideration,” Saadat continued.
Earlier this year, the ACCC denied insurers authorisation to put a joint cap on commissions paid to car dealers who sell add-on insurance policies, citing that customers could still be sold products without being given adequate information or opportunity to make a considered decision.
The ICA proposed a series of enhancements to the sale of add-on insurance products last year in a bid to upgrade sales processes and improve value for customers.
Brokers have also called for action with David Coe, managing director of Northwest Insurance, speaking to Insurance Business earlier this year about the need for further regulations to protect consumers and to create a level playing field.
“I would like to see tighter regulations on car yards and the like,” Coe told Insurance Business. ”Also, the banks offering products, particularly insurance products - we are getting a lot of people coming back to us from the banks that are very unhappy about the way that they have been treated.”
Related stories:
Competition watchdog rejects joint cap on add-ons
Car maker accused of selling 'junk' insurance
%20(500%20x%20315).jpg)
