Product laws key priority in ASIC corporate plan

Reducing the risk of consumer harm through product design and distribution is one of the top priorities included in the Australian Securities and Investments Commission (ASIC) plan for the next four years.

The Corporate Plan’s four strategic priorities also cover sustainable finance, retirement decision making and technology risks, while core projects include cyber and operational resilience, breach reporting and the Financial Accountability Regime, subject to the passage of legislation.

“ASIC will take strong and targeted enforcement action to protect consumers and investors and to maintain trust and integrity in the financial system,” Chairman Joe Longo said today.

The plan says ASIC will undertake “targeted risk-based surveillances” as part of its design and distribution obligations project and will take action where necessary on insurance, superannuation, credit and other financial products.

The product rules and breach “reportable situations” reforms have required significant changes to industry participants’ systems and processes, ASIC says.

“These reforms reshaped what is expected of financial services firms, alongside the increasing demand from consumers for transparency,” the regulator says.

“Moving forward it will be important to monitor the implementation of the reforms and give effect to them, so that their benefits for consumers can be realised.”

Other work related to general insurance includes a focus on claims handling and pricing misconduct.

ASIC says it will analyse consumer experience when making home insurance claims, following disasters and other events and identify poor claims handling conduct, with the project having a two-years plus timeframe.

More immediately, the plan includes engaging with insurers over pricing practices and reviewing the use of unfair practices, such as price optimisation.

Climate risk and impacts on company sustainability goals are a focus across the areas ASIC regulates.

“Companies are increasingly reporting sustainability-related risks and opportunities as these become an important focus for investors and stakeholders,” it says. “With sustainability-related investment growing, there is an increased risk of greenwashing.”

The plan is available here.