Allens

Insurance & Reinsurance

Our experienced Insurance & Reinsurance legal team regularly publishes articles and updates - the full list of publications appears below. Our insurance publications provide regular commentary on issues affecting the industry. We also give detailed updates on cases before the courts both in Australia and overseas. If you'd like to be notified when we add new insurance & reinsurance publications to the site, please go to our subscription page to sign up for email alerts or, alternatively, you can subscribe to our RSS feed.

Read about our track record in insurance law.

For an overview of the most important cases and developments in this area, see our series of Annual Review archive.

Insurance & Reinsurance Publications

  • Unravelled: AFCA's powers and obligations - 'systemic issues'

    13 November 2018

    In his Interim Report, Commissioner Hayne rejected claims that misconduct in the financial services sector was the fault of 'a few bad apples' and did not raise 'broader or systemic concerns'. Commissioner Hayne's comments made me think about AFCA and what it can do (and must do) about 'systemic issues' identified in the course of handling complaints.

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  • Unravelled: Efficiently, honestly and fairly - overarching and fundamental obligations?

    11 October 2018

    In his recent Interim Report into Misconduct in the Banking, Superannuation and Financial Services Industry, Commissioner Hayne makes a lot of the duties of an Australian financial services licensee and an Australian credit licensee to provide financial services or credit activities, as the case may be, efficiently, honestly and fairly.

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  • Unravelled: Royal Commission: Round 2 - experiences with financial advice

    2 October 2018

    Although the Commissioner says that the Royal Commission is part of the executive and not the judiciary and that he is therefore not able to make any findings of law, he comes pretty close in his views in response to Round 2. And in some important respects, those views do not correspond with conventional views.

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  • Unravelled: Royal Commission: Round 4 – experiences with financial service entities in regional and remote communities

    2 October 2018

    In the Interim Report, the Commissioner identifies four principal issues relating to agricultural lending.

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  • Unravelled: Competing class actions - a problem in need of a solution

    20 August 2018

    As fertile ground for class actions, the Royal Commission has highlighted an ongoing problem with Australia's class action regime – there is no clear, consistent means for resolving competing class actions.

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  • Unravelled: Update on the Royal Commission

    19 July 2018

    Have you been wondering what the Royal Commission will make of the numerous witness statements and vast amounts of other information collected from superannuation trustees in recent times? You will find out soon enough. But first, there are some curiosities from the Round Four hearings to consider – including a hint as to what the superannuation hearings will include.

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  • Unravelled: Update on the Royal Commission

    22 June 2018

    A lot has happened since our most recent update. The Royal Commission has published the submissions received from ASIC and industry participants on policy questions posed by Counsel Assisting at the end of the financial advice hearings. And the small business lending hearings have been held.

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  • Unravelled: Royal Commission update

    15 May 2018

    The hearings in the Financial Services Royal Commission have been compulsory viewing, not only for financial services industry participants and their regulators and professional service providers. The hearings have exposed wide-ranging actual or alleged wrongful conduct that has captured the attention of politicians, media and the general public.

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  • Focus: ASIC's sanctions and powers to be strengthened

    23 April 2018

    The Federal Government has announced that it proposes to strengthen ASIC's powers, and to increase the severity of penalties (civil and criminal) that can be imposed on individuals and corporations, in line with the ASIC Enforcement Review Taskforce's recommendations. Partner Rachel Nicolson and Senior Overseas Practitioner Chris Kerrigan report.

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  • Unravelled: The Royal Commission heats up

    9 April 2018

    The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is well underway, with its first round of public hearings wrapping up less than a month ago. By reference to a number of case studies, the first round of hearings focused on consumer lending practices. In this article, we report on the key themes identified by the Commission as arising from the hearings.

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  • Unravelled: Productivity Commission releases draft report on competition in the financial system

    20 February 2018

    The Productivity Commission's draft report on competition in the financial system, released earlier in February, makes 25 draft recommendations, a key focus of which are reforms to the regulatory system. We take you through the key issues and recommendations.

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  • Unravelled: A Commission of Inquiry - of the Royal, not the Parliamentary, kind

    19 December 2017

    Since the announcement of the Royal Commission into, ahem, financial services, much has been written and said – a lot of which suggests that little attention is being paid to the terms of reference. In this article I take a look at those terms.

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  • Client Update: Attorney-General announces class action inquiry

    18 December 2017

    The Attorney-General has announced that he has asked the Australian Law Reform Commission to inquire into class action proceedings and third party litigation funders. The inquiry presents an important opportunity to take stock of how the class actions landscape has evolved, particularly whether entrepreneurialism among promoters is inappropriately traversing on the rights of class members. Partner Jenny Campbell and Lawyer Jerome Squires report.

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  • Client Update: Grizzly times ahead for banks

    14 July 2017

    A consultation paper on the BEAR has been released, confirming the Federal Government’s intention to impose an executive accountability regime on banks and their subsidiaries that follows important elements of current international accountability regimes. You have three weeks to provide your comments to the Government. Partner Michelle Levy, Senior Associate Sarah Burgemeister and Associate Katie Gardiner report.

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  • Unravelled: CIPRs - some interesting findings

    5 May 2017

    We recently hosted some workshops in Sydney and Melbourne to discuss the proposed CIPR framework. The outcomes of those workshops were interesting - in some respects surprising - and this article provides a brief report.

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  • Unravelled: Recent decision on FoFA advice provisions - ASIC v NSG

    5 May 2017

    The recent case of ASIC v NSG Services Pty Ltd considers the FoFA best interests and appropriate advice provisions, as well as obligations of licensees. While the facts of the case provide an extreme example of how advisers and licensees can fail to comply with these duties, it also provides some useful judicial commentary on the provisions.

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  • Unravelled: Reporting significant breaches - or something that may (or may not) be a breach?

    5 May 2017

    The Taskforce established by Treasury to consider ASIC's enforcement powers released its first consultation paper a few weeks ago on breach reporting. We examine the most significant of the Taskforce's 12 'preliminary positions'.

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  • Unravelled: A step closer to industry funding of ASIC

    7 April 2017

    Last week, the Federal Government moved another step closer to implementing an industry funding model for the recovery of ASIC's costs, by introducing the ASIC Supervisory Cost Recovery Levy Bill 2017 (as well as two related Bills) into Parliament. These Bills implement the recommendations of the Financial Services Inquiry and the Senate Economics Committee that ASIC be industry funded, and follows a number of rounds of industry consultation on exposure drafts and proposal papers.

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  • Client Update: Productivity Commission's proposed alternate default models for superannuation

    30 March 2017

    In the latest (and undoubtedly most significant) of its reports into the design of default superannuation arrangements in Australia, the Productivity Commission yesterday released its Draft Report in relation to Superannuation: Alternative Default Models. Partner Geoff Sanders of the Allens Superannuation team reports on how the Draft Report moves the Commission's thinking forward in relation to how default contributions might be allocated to superannuation products in the years to come.

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  • Paper: 25 years of class actions

    27 March 2017

    Class action risk is changing. A new wave of entrepreneurialism by plaintiff lawyers and litigation funders has substantially changed class action dynamics in recent times. The 25th anniversary of the class action regime is a good opportunity to reflect on whether, in the light of those and other developments, the regime is still serving its objectives.

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  • Unravelled: Consumer protection in the banking, insurance and financial sector

    10 March 2017

    The Senate Economics References Committee is conducting an inquiry into the regulatory framework for the protection of consumers in the banking, insurance and financial services sector.

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  • Client Update: Product design and distribution rules

    13 December 2016

    On 13 December 2016, Treasury released a paper seeking feedback on the proposed financial product design and distribution obligations, and proposed product intervention powers for ASIC. The proposals are intended to 'create new accountability obligations' for product issuers and distributors. On one view, it is a brave new world, on another, it is just more of the same. Which it turns out to be, we think, will depend on what product issuers make of it and what ASIC does with it. Industry has until March 2017 to make submissions on the detail, it is unlikely that more substantial objections to the policies will be successful. The Financial Services Regulation team report.

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  • Client Update: Updated fee and cost disclosure - transition period extended

    29 November 2016

    ASIC has today announced that superannuation fund trustees and responsible entities will have until 1 October 2017 to comply with the updated fee and cost disclosure rules for PDSs set out in ASIC Regulatory Guide 97 and ASIC Class Order 14/1252 - but only if they comply with certain conditions. Partner Geoff Sanders and Senior Associate Stephanie Malon report.

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  • Unravelled: Life insurance, conflicted remuneration and commissions

    3 November 2016

    The Bill to amend the conflicted remuneration provisions in the Corporations Act for life insurance has been introduced into Parliament a second time and draft regulations have been released for comment. However, we struggle to know how to describe them because the changes seem to have conflicting purposes.

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  • Client Update: Conflicted remuneration and life insurance

    20 October 2016

    Exposure draft life insurance regulations were released yesterday. They are a marked departure from the existing conflicted remuneration provisions. Now, a benefit can only be conflicted remuneration if it could reasonably be expected to influence financial product advice. These regulations will create a new class of conflicted remuneration for life risk insurance products that does not depend on the benefit being expected to exert the relevant influence. This will apply 'in addition' to the existing definition of conflicted remuneration. Partner Michelle Levy, Senior Regulatory Counsel Michael Mathieson and Managing Associate Simun Soljo look at the draft regulations.

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  • Client Update: Life insurance industry gets a remuneration Bill, ASIC report and Code of Practice

    12 October 2016

    This is a significant week for the life insurance industry, with the re-introduction by the Federal Government of a Bill to reform commissions payable on life insurance policies, the release by ASIC of findings of its review of life insurance claims, and the launch yesterday by the Financial Services Council of its Life Insurance Code Of Practice. Partner Michelle Levy, Managing Associate Simun Soljo, and Lawyer Nicholas Borger report.

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  • Unravelled: The Life Insurance Code of Practice - just a code, or something more?

    7 October 2016

    The new Life Insurance Code of Practice has much to recommend it. The paragraphs concerning policy design are a case in point. But is the Code indeed just a code or does it purport to go further?

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  • Unravelled: Practical pitfalls and the sacrosanct limitation of liability clause

    7 October 2016

    Commercial trusts could not operate without limitation of liability clauses; however, getting a limitation of liability clause just right is very challenging.

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  • Unravelled: Financial Services Class Actions

    6 September 2016

    Our class actions team recently published our Class Action Risk 2016 report. The objective of the report is to look behind the headlines and hype that often surrounds class actions to provide a more holistic and objective assessment of class action risk for our clients. This is particularly important in an environment in which the press surrounding class actions has often heralded a developing crisis for Australian business.

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  • Unravelled: Improving the role of the Appointed Actuary

    6 September 2016

    APRA is seeking to improve the role of the Appointed Actuary in general and life insurance companies and has proposed some reforms in a discussion paper released earlier this year.

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  • Report: Class action risk 2016

    19 August 2016

    Class actions have featured frequently in the press in recent years, often with a theme of a developing crisis for Australian business. It is, however, important that class action risk be assessed by reference to objective data rather than the headlines. Having gathered and analysed that data, our report identifies some interesting trends that run counter to some of the typical commentary.

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  • Unravelled: Conflicts of interest and the duty to manage them

    9 August 2016

    The Corporations Act 2001 (Cth) was amended in 2004 to include an additional obligation for Australian financial services licensees to have in place adequate arrangements for the management of conflicts of interest that may arise in relation to the activities undertaken by the licensees in the provision of financial services. Conflicts were an afterthought, coming a couple of years after the Financial Services Reform Act (Cth) in 2001. At the time, it didn't seem to be a particularly onerous obligation, and so it has proved. The regulators and various enquiries and committees have criticised financial services providers for letting conflicts of interest get in the way of their customers' interests, but the Corporations Act obligation to have adequate arrangements for managing conflicts is a poor basis for requiring licensees to put their customers' interests first'

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  • Unravelled: Post-election policy recap

    9 August 2016

    As the dust settles following the recent federal election, it is a good time to reflect on what we can expect from the re-elected Coalition Government for the financial services sector. There are two main groups of policy proposals that are going to need to get through Parliament. The first is the fairly significant superannuation changes announced in the 2016/17 Budget in May. The second is the series of changes the Government announced in its response to the Financial System Inquiry. This brief article provides a refresher on each of them.

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  • Unravelled: AMITs are here (at last)

    2 June 2016

    It has taken a while, but out of the dust of an early Federal Budget and double-dissolution election announcement, a new tax attribution regime for 'Attribution Managed Investment Trusts' has emerged relatively intact. While the AMIT regime should generally be welcomed as a positive thing for MITs in terms of certainty and flexibility, it remains to be seen whether it will achieve another of its original aims.

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  • Unravelled: New ASIC funding - looking beyond the headlines

    4 May 2016

    Along with the public release of the ASIC Capability Review Report, the Government announced a suite of reforms giving ASIC additional (but targeted) funding and has also sought to remove some of the shackles on hiring it believes may be hindering ASIC's ability to recruit top talent. At the same time, the Government confirmed that a 'user pays' model will be introduced for ASIC's funding needs from the second half of 2017 onwards.

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  • Unravelled: ASIC getting a bigger toolkit sooner than expected

    4 May 2016

    In its response to the capability review into ASIC, the Federal Government has made a commitment to accelerate the implementation of a product intervention power for ASIC and the product design and distribution obligations for the financial services industry, but it left to one side some other important issues raised by the review. We consider what this might mean for both the regulator and the regulated.

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  • Unravelled: 'Tough cop' ASIC vs a Royal Commission

    4 May 2016

    Has talk of a royal commission turned the ASIC Capability Review into an unlikely catalyst for an enhanced enforcement agenda? With Labor pushing hard for a royal commission into the banking and financial services industry and an election looming, the Government moved swiftly to announce broad reform measures to equip ASIC with stronger powers and funding, as well as a new Commissioner with a financial crime prosecution background, to ensure that, in ASIC, Australia has a 'tough cop on the beat'.

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  • Unravelled: A long time coming: The Retirement Income Streams Review Report

    4 May 2016

    Going into the 2013 election, the present Government promised a review of the regulatory framework for retirement income streams. Today, the Government finally released its report. It has been a long time coming. And while the main outcome – a new category of tax effective pensions and annuities – will be welcomed by many, there are unanswered questions and implementation may take a while.

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  • Unravelled: Utmost good faith, life insurance and ASIC

    5 April 2016

    This year is the 250th anniversary of one of the most famous insurance cases. The judgment of Lord Mansfield in Carter v Boehm in 1766 is frequently cited as establishing the principle that parties to an insurance contract owe each other duties of utmost good faith.

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  • Client Update: ASIC's guidance on conflicts in vertically integrated funds-management businesses

    24 March 2016

    ASIC has released a report looking at the way 'vertically integrated' funds management businesses deal with conflicts of interest. The report summarises the findings of ASIC's recent review of a number of businesses, and sets out some good practice recommendations. Partner Marc Kemp and Senior Associate Simun Soljo look at the report.

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  • Focus: Being 'professional' under D&O insurance policies

    8 March 2016

    In a recent decision, the Full Federal Court has clarified the scope of a ‘professional services’ exclusion in a Directors & Officers insurance policy. Partner Andrew Maher and Senior Associate Andrew Lazzaro report on a case that gives some guidance on the relationship between professional indemnity and D&O insurances.

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  • Unravelled: Dodd Frank - promoting financial stability and other purposes

    7 March 2016

    The Dodd Frank Act is a bit like the US financial system it is trying to regulate – vast, complex and hard to wade through. It creates a bunch of new regulators on top of what was already a pretty solid cast and gives them wide-ranging powers. They can not only set capital and liquidity requirements for banks and make rules about what they can and cannot do, but they can also shut down or sell off parts of their businesses. But are these regulators smart enough or well enough resourced to identify the risks?

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  • Unravelled: Transparency and Accountability - and not just for Wall Street

    7 March 2016

    The regulatory law repercussions of the GFC remain endlessly fascinating. As an example, take the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010. It runs to 848 pages. Title VII addresses, perhaps optimistically, 'Wall Street Transparency and Accountability'. My favourite provision is section 716, headed 'Prohibition Against Federal Government Bailouts of Swaps Entities'. This heading suggests that, if there is ever another AIG, it can't be bailed out. Too-big-to-fail solved by legislative prohibition. If only it was that easy.

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  • Focus: Strangers no more - Taking action against an insolvent defendant's insurer

    16 February 2016

    The High Court of Australia has decided that a third party claimant can join an insolvent or potentially insolvent defendant's insurer to proceedings to seek a declaration that the insurer is liable to indemnify the defendant. Partner Andrew Maher and Lawyer Shelley Drenth discuss the decision and its implications. 

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  • Unravelled: Conflicted remuneration, dreaming and the law of common sense

    5 February 2016

    How many times have you heard someone say 'FoFA is settled'. Next time you hear that, you should reach for one of the many quotable quotes from The Castle and 'tell 'em they're dreamin'. First, there are the so-called 'Retail life insurance industry reforms'. Then, get ready for remuneration reforms in the mortgage broking industry. After that will come remuneration reforms in the stockbroking industry. And APRA recently set up a taskforce to examine the remuneration of banking executives.

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  • Unravelled: Raising professional standards of financial advisers

    5 February 2016

    Following on from the reviews conducted by the Parliamentary Joint Committee and the Financial System Inquiry, the Government delivered on its promises by releasing an exposure draft of the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2015 (the Bill) late last year for consultation. As its title suggests, the draft Bill proposes a number of amendments to the Corporations Act to raise the professional standards of financial advisers that are to apply from 1 July 2017. Many of these reforms impose obligations that licensees in the retail financial advice and superannuation trustees should carefully consider and begin making provision for.

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  • Client Update: New measures on resilience, collateral protection and client money

    22 December 2015

    The Government yesterday released for consultation draft legislation containing 'resilience and collateral protection' measures. Think payment systems, netting and derivatives. But also think superannuation trustees and life companies investing in centrally-cleared OTC derivatives – and restrictions on charging assets. The Government also released a policy paper on how to make the client money provisions more protective. Partners Tom Highnam and Michelle Levy and Senior Regulatory Counsel Michael Mathieson look at some of main points of the new draft legislation.

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  • Unravelled: Product rationalisation - again

    8 December 2015

    The FSI report recommended that the Government facilitate rationalisation of legacy products in the life insurance and managed investment scheme industries. The need for ways to close legacy products has been kicking around for at least a decade and, in 2007, Treasury released a very thorough options paper covering product rationalisation in the managed funds sector. Treasury said that sector was represented by life insurance, managed investment schemes and superannuation.

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  • Unravelled: Government launches innovation agenda - now wait for the ideas boom

    8 December 2015

    You might be getting tired of all of the talk about 'innovation', and keen to see some of it actually happen. The Government's recent announcements could help, but there is a long way to go before the 'mining boom' becomes the 'ideas boom'.

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  • Unravelled: FSI outcomes - what will happen and when?

    8 December 2015

    Are you interested in the financial system and how it is regulated? The Federal Government's response to the Financial System Inquiry was recently handed down but it can be hard to work out where, exactly, things are heading. We have put together a table that sets out what is likely to happen and when.

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