Australian Securities and Investments Commission (ASIC) Vice Chair Karen Chester said:
“Policy wording has not been updated to align with applicable law and that leads to unnecessary uncertainty for insurers about their level of risk and for insurance policies,” said Ms. policyholders about their coverage. “And it was uncertain for a long time.”
Ms. Chester said that investment in acquiring data, systems and internal controls was essential and was long overdue amid concerns about other issues.
“Simply put, the systems are in place and the underinvestment process is increasing your exposure exponentially,” she told the Insurance Council of Australia Annual Industry Forum ( ICA).
ASIC has asked insurers to communicate regularly, simply and transparently with their policyholders and brokers throughout the business interruption review, with appeals on the third case. two are expected next month.
Ms. Chester also told the forum that international research on “mud” indicators has shown difficulties in comparing products that can be unnecessarily complicated, while the data providing companies with Potential coverage for improvement.
“There are so many bells and whistles attached to insurance products that make comparisons almost impossible,” she says.
Ms. Chester highlighted a recent Financial Rights Legal Center (FRLC) article that suggested automatically pre-populating driving history and claims in insurance policies.
A pre-fill system exists in the UK and the FRLC has urged governments and insurers to consider similar options, potentially facilitated by Consumer Data Rights reforms
Ms Chester said in the UK, unintentional non-disclosure affected one in six people, meaning their motivation policy was then not applied.
“It actually became junk insurance, because they didn’t disclose it, so it’s a really good example of an innovation, a very simple one, that has been proposed by the Center for Legal Rights. Finance,” she said.
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