Insurers urged to clean up their act before demanding less regulation

📊 Insurance News Analysis: Our editorial team has analyzed recent developments from insurancebusinessmag.com in the Insurance sector. This report covers key insights related to car insurance, life insurance, health insurance and emerging industry trends that professionals should monitor closely.

Recent analysis in the Insurance sector reveals significant developments. By Daniel Wood
The Australian Consumers Insurance Lobby (ACIL) has pushed back against claims from the Insurance Council of Australia (ICA), which argued that the regulatory load is adding up to $3.5 billion a year to consumers’ insurance costs and creating “compounding and unsustainable” operating expenses for insurers. ACIL contends that the industry’s focus on reducing regulation overlooks the fundamental reasons these rules were introduced.

“If insurers want to have a serious conversation about reducing regulation, the starting point has to be better conduct,” stated Tyrone Shandiman (main picture), chairperson of ACIL. On Friday, the ICA released The Cost of Regulatory Burden report that demonstrated – for the first time according to the ICA – the “compounding and unsustainable” cost insurers face meeting a mounting number of regulations. Andrew Hall, the ICA’s CEO, struck a conciliatory tone. “Much regulatory cost is reasonable,” he said, because it protects consumers and ensures the stability of the insurance industry.

“But the combined impact of 30,000 regulatory obligations is duplication, increased costs, and delays for insurance customers,” he stated. Read next: Insurers warn regulatory drag costing industry hundreds of millions a year
ACIL has pushed back against the report because it stated the regulations are a response to the fact that the industry is not meeting expectations. “The complaints data and the evidence we continue to see through government inquiries, doesn’t reflect an industry that’s meeting community expectations,” said Shandiman to IB. The ICA and many industry stakeholders have long supported self-regulation as a way to offset the need for what they see as excessively burdensome and sometimes unnecessary government-enforced regulations.

Sources indicate that shandiman would have none of it. Read next: Complexity crisis: Generalist brokers battle regulatory overload
“The reality is that self-regulation only works when it’s credible, and right now it’s not,” he said. Shandiman described the Insurance Industry Code of Practice review as “stalled” and stated key recommendations from the industry’s own inquiry have been ignored without explanation. Data shows that “Until insurers can show that they’re genuinely committed to transparency and accountability, the case for winding back regulation simply doesn’t exist,” he said.

The ACIL chair pointed to ASIC’s Regulatory Guide 271. This rule requires insurers to record all “expressions of dissatisfaction”, not just formal complaints. The ICA identifies this rule as burdensome in one of the case studies in its report: “The expanded definition of a “complaint” in ASIC’s Regulatory Guide 271 has created a significant administrative load for insurers with limited benefit for identifying systemic issues,” stated the ICA’s analysis.

Sources indicate that “We’re still seeing widespread issues with delays and this reporting gives regulators visibility over problems that might otherwise go unseen,” he stated. The ACIL chair stated this process can be refined but transparency and data are essential for regulators to ensure the market is working for consumers.

Experts suggest this represents a significant moment for the Insurance sector, with implications extending beyond immediate stakeholders.

— Based on reporting from insurancebusinessmag.com

💡 Key Industry Insights

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Specifically regarding auto insurance, market observers note continuing evolution in service delivery, pricing models, and customer engagement strategies that merit close attention from industry stakeholders.

Market Impact: These developments in car insurance may significantly influence market dynamics. Industry experts recommend monitoring these trends closely for strategic planning purposes.

Analysis Note: This comprehensive overview synthesizes current market intelligence from insurancebusinessmag.com regarding life insurance and related sectors. Stay informed about ongoing developments in this rapidly evolving landscape.