Insurance horizon scanning - upcoming reforms
On 12 November 2020, the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020 was introduced to Parliament. As the name suggests, the Bill seeks to address a number of recommendations from the Financial Services Royal Commission, the majority of which will impact the insurance industry. To name just a few, these reforms include a prohibition on hawking of insurance, a deferred sales model for add-on insurance products and the introduction of claims as a financial service.
While these reforms won’t necessarily be a surprise to industry participants (with exposure drafts having been released in January this year), the Bill sets out the dates by which participants will need to comply with the reforms once the Bill is passed. Broadly, the timing is consistent with the 6 month deferral of implementation that was indicated by the Government earlier this year (in light of COVID-19). Additionally, the Bill does differ from the exposure drafts in some respects that should be tracked and understood by insurers.
The changes set out in the Bill are in addition to a number of reforms already passed, including the design and distribution obligations and the extension of the unfair contract term regime to insurance contracts.
There is no doubt that the insurance industry is going through a period of significant regulatory change, with numerous upcoming changes insurers and other industry participants need to be aware of. Please click here to download the DLA Piper horizon scanning booklet as a guide to help you understand the upcoming reforms, including the dates by which you must comply with these.