Risk Regulatory Updates

Regulatory Updates

FASEA adviser exam schedule 2021

Financial Adviser Standards and Ethics Authority (FASEA) is to run six exam sittings in 2021, with in-person sittings in metropolitan and regional locations across the country. The exams will be run over several days, up to twice per day. The exam schedule can be found at FASEA’s website. Advisers can also sit the exam remotely during the exam sitting window.

Westpac uncovers more problematic transactions

Westpac Bank has announced to AUSTRAC hundreds of thousands of extra transactions of $10,000 or more that are ‘incomplete or inaccurate’. The additional 175,000 transactions were not reported to AUSTRAC with the previous 365,000 that were reported. Civil proceedings were brought against Westpac in November 2019, while the bank is also being investigated by multiple Australian regulators and watchdogs over alleged anti-money-laundering law breaches.

AMP own advisers file class action against it

A year after AMP cut its Buyer of Last Resort valuations in 2019, its advisers have filed a class action. The BOLR valuation is to be cut from 4x recurring revenue to a maximum of 2.5x. The class action was filed by Corrs Chambers Westgarth against AMP, on behalf of AMP Financial Planning advisers. The Australian Small Business and Family Enterprise Ombudsman have also seen over 100 complaints about the issue, with Labor Senator Deborah O’Neill calling for a review of AMP’s behaviour. AMP is currently in the midst of two other class actions.

40pc increase in retail insurance complaints over 2019 FY

According to an independent report into FSC code compliance by life insurers, life companies reported a 40 per cent increase in complaints about retail insurance products for the 2019 financial year. The Life Insurance Code Compliance Committee report shows there were nearly 10,000 complaints to 20 life insurance companies over the year, about retail life insurance products, making up almost half of all complaints received by insurers.

Direct insurance saw an increase of 21 per cent in complaints, with over 7,000 in total. Direct insurance complaints made up 37 per cent of all complaints received by life insurance companies over the year.

Overall, complaints about life insurance increased by 29 per cent. Claims processing times also took a dive, with 17 per cent of income-related claims not being processed in the correct time frame, compared to 11 per cent in 2018. Non-income-related claim times also went down, but by a less severe margin: nine per cent were not processed in the required timeframe, versus eight per cent in 2018.

Consumer advocacy group calls for universal terms in group insurance

Super Consumers Australia says the introduction of universal terms would prevent some insurance companies using ‘unfair’ criteria, such as activities of daily living test, to establish when and if to pay a total and permanent disability (TPD) claim. During the COVID-19 pandemic, superannuation fund members are at risk of being denied TPD claims due to COVID-related job losses.

SCA wants ‘unfair’ ADL tests to be scrapped while making it easier for consumers to understand and compare policies, to reasonably expect that the insurance they pay for will cover them if something goes wrong.