ASIC Identifies Insurance Claims Handling as an Enforcement Priority

The Australian Securities and Investments Commission (ASIC) has confirmed that insurance claims handling will be a key enforcement priority for 2024. This follows a year of regulatory focus on pricing misconduct in the insurance industry.

According to an ASIC media report dated 27 November 2023, the regulator intends to shift its attention to claims handling practices after identifying ongoing issues affecting consumers during the claims process.

Statement from ASIC's Deputy Chair

At the ASIC Annual Forum, Deputy Chair Sarah Court stated that the regulator is now “turning our attention to failures in insurance claims handling.” She acknowledged that many Australians rely on insurers during difficult times and that timely, fair and transparent claims processing is essential for consumer protection.

“We will focus on delays in claims handling, poor communication and record keeping, and inappropriate use of exclusions,” Ms Court said.

This statement reflects ASIC’s broader commitment to ensuring that financial service providers meet their obligations under Australian law.

What This Means for Policyholders

This increased scrutiny by ASIC signals a growing expectation that insurers must treat policyholders fairly, especially when they make a claim. If your insurer does any of the below, you may be entitled to raise a formal complaint or seek legal advice.

Delays your claim without clear explanation
Fails to provide accurate or timely communication
Applies policy exclusions in an unreasonable or unfair way
Maintains poor records that impact the outcome of your claim

The insurance claims process must now meet legal standards as part of a regulated financial service. This includes the obligation to provide services efficiently, honestly and fairly.

Breach Reporting Obligations Under the Corporations Act

Under the current regulatory framework, Australian Financial Services (AFS) licensees and Australian Credit Licensees must notify ASIC when certain breaches occur. These are referred to as reportable situations and include conduct that is considered a significant breach of core obligations under the Corporations Act 2001 (Cth) or the National Consumer Credit Protection Act 2009 (Cth).

This regime is designed to promote greater accountability and transparency across the insurance and financial services sectors. It also provides ASIC the power to investigate and enforce compliance where insurers or licensees fall short of their legal duties.

How we can assist…

At Bastion Legal, we help everyday Australians navigate complex legal issues with practical, straightforward advice. Our team is dedicated to resolving disputes, protecting rights, and achieving fair outcomes. Whatever challenge you’re facing, we provide clear guidance, strong representation, and practical solutions tailored to your situation.

If you’re facing a situation like the one discussed above, you do not need to face these issues alone. We’re here to protect your interests and work towards the outcome you deserve.

Contact us today for a free consultation and take the next step with confidence.

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