What's next?

A continued focus on insurers' delivery of pricing promises to customers, with ASIC particularly concerned about the use of unfair tactics (such as price optimisation techniques and misleading loyalty representations). In a recent speech, Deputy Chair Karen Chester reiterated ASIC's call to insurers to 'get the basics right' on pricing promises,¹ suggesting this is an area ASIC continues to monitor closely. 

Selective enforcement activity against insurers for inappropriate claims handling practices, especially in the wake of major natural disasters, following the recent release of ASIC's Navigating the Storm report.² We are aware of ASIC commencing several investigations into these issues in recent months, and the House of Representatives Standing Committee on Economics' Inquiry into Insurers' Responses to 2022 Major Flood Claims is due to report by 30 September 2024.

Further targeting of unfair contract terms in insurance products, with two cases already commenced this year, and ASIC likely to bring several more to cement awareness of this new obligation in the industry. Unfair contract terms have been identified once again as one of ASIC's 2023 enforcement priorities, with a particular focus on maintenance and 'wear and tear' provisions in home insurance policies.

Enforcement action against insurers for contraventions of the design and distribution obligations (DDO). On 29 June 2023, ASIC issued 38 interim stop orders relating to 67 pet insurance products issued by the Hollard Insurance Company and PetSure across different levels of cover. A further interim stop order was issued in July 2023 for a life insurance product. ASIC has indicated that the next phase of its DDO compliance program will include a focus on 'low value insurance'.

Additional scrutiny of insurers over 'green' underwriting and other ESG-related commitments, following the trend of increased activity by ASIC against superannuation funds for misleading comments about their socially responsible investment credentials. In ASIC's 2023-27 Corporate Plan, ASIC re-affirmed its focus on deterring greenwashing, with sustainable finance practices among its strategic priorities. 'Bluewashing' is also of concern to the regulator, with ASIC recently securing a $1.2 million penalty against ACBF Funeral Plans for alleged bluewashing in the sale and promotion of funeral expense insurance to indigenous customers.