subscribe to our newsletter
ASIC releases findings from PI review

ASIC releases findings from PI review

A new report from the corporate watchdog has found that gaps exist in the market for professional indemnity insurance for financial advisers between what ASIC expects and some of the insurance products available.

All Australian Financial Services (AFS) licensees must have arrangements to compensate clients and generally this means holding adequate PI insurance. ASIC's minimum requirements for PI insurance are set out in Regulatory compensation and insurance arrangements for AFS licensees (RG 126).

Released yesterday, the ASIC report into the market for the eight months to June 2015 found that while the market was basically sound, some PI insurance policies do not meet the requirements in RG 126.

The review was carried out in response to AFS licensee concerns about securing PI insurance and the high level of unpaid external dispute resolution scheme determinations.

“Advice businesses must have adequate PI insurance, and they should make sure this cover measures up with our requirements in RG 126,” ASIC deputy chairman Peter Kell said.

“ASIC will follow up with surveillance of advice licensees' PI insurance and if we find problems we will take enforcement action.”

The ASIC review was carried out between November 2014 and June 2015 and sought to understand the availability and cost of PI insurance.

This included testing the concerns ASIC has heard from some advice licensees over the past few years that they have been unable to secure PI insurance at a reasonable cost, and determining whether the insurance available conforms with ASIC’s guidance about what we consider to be adequate PI insurance – in particular, whether there are any significant deficiencies in the PI insurance that is generally available to advice licensees.

ASIC releases findings from PI review
mortgagebusiness logo

Latest News

The removal of APRA’s “redundant” cap on investor lending is unlikely to prompt a rebound in investor credit growth amid continual sof...

The impending Consumer Data Right could iron some of the kinks out of the home loan application process, the chair of the ACCC has suggested...

A big four bank has announced that, by the end of this month, it will no longer offer self-managed super fund loans for new consumer or busi...

Promoted Stories

podcast

LATEST PODCAST: Wayne Byres on mortgages, trusted brands and broker remuneration

Do you expect access to credit to get harder this year?