What to watch in the year ahead

Based on ASIC's recent pronouncements, and those of other key regulators, there is no reason to expect any easing in the heightened enforcement environment in which insurers are now well accustomed to operating. While 'getting the basics right' remains important, the following trends are likely to become increasingly prominent in the years ahead:

• We anticipate further proceedings highlighting alleged deficiencies in claims and complaints handling, with ASIC particularly concerned about delays and poor communication. We expect that regulators will continue to make use of insurers' duty of utmost good faith and obligation to handle claims efficiently, honestly and fairly under s912A(1)(a) of the Corporations Act. In this respect, we await the Court's decision in the Telstra Super proceeding, which may be influential for the direction of future claims.
• Consistent with this focus on consumer outcomes, the Insurance Council of Australia is in the process of redrafting the General Insurance Code of Practice. A draft is expected to be lodged with ASIC for approval in mid-2026.¹ Relevantly, it is anticipated that aspects of this amended code will be contractually enforceable, potentially adding to the array of alleged contraventions available to regulators in the context of, for example, claims handling.
• Following the recent spate of superannuation industry cyber incidents earlier this year, we expect regulators will continue to focus on cyber resilience across financial service sectors, including insurance. Where insurers are found wanting in terms of appropriate information security controls, incident response plans and data retention and destruction practices, enforcement activity may follow.
• We expect that ASIC and other regulators may extend their focus on greenwashing to 'green' underwriting and other ESG-related commitments made by insurers. We also expect ASIC will continue to focus on the intersection between governance failings and greenwashing. In this respect, the proceedings recently commenced by ASIC, in which it is alleged that Fiducian failed to act with care and diligence and engaged in misleading or deceptive conduct in its capacity as responsible entity of an ESG fund will be one to watch closely.