The Hon Scott Morrison and the Hon Kelly O’Dwyer released the Government’s response to the Financial System Inquiry today in which the Government accepted the majority of the inquiry’s recommendations and included six additional measures (the six additional measures are not relevant to insurance).

The Government’s financial system program consists of 5 strategic priorities:

  • The resilience measures – aim to reduce impact of potential future financial crises by ensuring we are better able to weather them and lessen cost to taxpayers and economy.
  • The superannuation and retirement incomes measures – aim to improve the efficiency and operation of superannuation system and in doing so boost retirement incomes.
  • The innovation measures – will unlock new sources of finance for wider economy and support competition.
  • The consumer outcomes measures – designed to give consumers confidence to participate in financial system and confidence that they are being treated fairly.
  • The regulatory system measures – aim to make regulators more accountable for their performance, more capable and more effective.

The big ticket items for insurance appear to be:

  • Inquiry Recommendation 5 — Crisis management toolkit
  • Inquiry Recommendation 21 — Strengthen product issuer and distributor accountability
  • Inquiry Recommendation 22 — Introduce product intervention power
  • Inquiry Recommendation 23 — Facilitate innovative disclosure
  • Inquiry Recommendation 24 — Align the interests of financial firms and consumers
  • Inquiry Recommendation 25 — Raise the competency of advisers
  • Inquiry Recommendation 26 — Improve guidance and disclosure in general insurance
  • Inquiry Recommendation 40 — Provision of financial advice and mortgage broking
  • Inquiry Recommendation 43 — Legacy products

To request a full summary of the issues email us a request at [email protected]