An elevated 'new normal' in filings
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Regulatory enforcement activity against insurers is down from its peak in 2021, which saw the commencement of a record number of eight new proceedings, many of which were referrals from the Financial Services Royal Commission (the FSRC). Overall, however, new filings remain robust and elevated from their historical average, with four proceedings commenced so far in 2023. |
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Civil penalty proceedings remain the Australian Securities and Investments Commission's (ASIC) preferred enforcement pathway, combined with a select number of referrals of criminal matters to the Commonwealth DPP for prosecution. While the data shows a handful of infringement notices issued to insurers between 2015 and 2018, none have been issued since – which may reflect ASIC's response to Commissioner Hayne's sustained criticism of non-court-based remedies throughout the FSRC. |
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Interestingly, in recent times, ASIC has not shied away from the use of infringement notices and enforceable undertakings against superannuation and other investment funds in relation to allegations of greenwashing. In light of this trend, we expect to see in the near future the pendulum swing back from the exclusive use of criminal and civil penalty proceedings against insurers. |
