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ASIC’s Corporate Plan 2024–25 outlines the projects ASIC will undertake to deliver on their important mandate. ASIC makes a crucial contribution to maintaining Australia’s fair, strong and efficient financial system. The priortites relevant for General Insurance have a focus on claims handling practices including enforcement actions. 1. 𝙄𝙢𝙥𝙧𝙤𝙫𝙚 𝙘𝙤𝙣𝙨𝙪𝙢𝙚𝙧 𝙤𝙪𝙩𝙘𝙤𝙢𝙚𝙨 – undertake a cross-sector surveillance of compliance with the requirements outlined in Regulatory Guide 271 Internal dispute resolution (RG 271). – In 2024, ASIC will publish observations from the first year of IDR data reported by all firms, while in 2025 ASIC will publish firm-level IDR data. – take action against insurers in relation to claims handling, especially in relation to home insurance claims. – take action in response to harmful product design and distribution practices, including conduct that results in consumers receiving unsuitable products. – monitor general insurers’ improvements to claims handling and engage with the independent review of the 2020 General Insurance Code of Practice. 2. 𝘼𝙙𝙙𝙧𝙚𝙨𝙨 𝙛𝙞𝙣𝙖𝙣𝙘𝙞𝙖𝙡 𝙨𝙮𝙨𝙩𝙚𝙢 𝙘𝙡𝙞𝙢𝙖𝙩𝙚 𝙘𝙝𝙖𝙣𝙜𝙚 𝙧𝙞𝙨𝙠 ASIC will review how general insurers are handling customer complaints and responding to recommendations from previous reviews about their handling of claims following severe weather events. 3. 𝘼𝙙𝙫𝙖𝙣𝙘𝙚 𝙙𝙞𝙜𝙞𝙩𝙖𝙡 𝙖𝙣𝙙 𝙙𝙖𝙩𝙖 𝙧𝙚𝙨𝙞𝙡𝙞𝙚𝙣𝙘𝙚 𝙖𝙣𝙙 𝙨𝙖𝙛𝙚𝙩𝙮 ASIC will continue to monitor how retail financial services use AI and advanced data analytics. ASIC will also assess their risk management and governance processes. 𝙊𝙩𝙝𝙚𝙧 𝙠𝙚𝙮 𝙖𝙘𝙩𝙞𝙫𝙞𝙩𝙞𝙚𝙨 1. ASIC will continue to work closely with APRA to implement the FAR by providing guidance, engaging with industry and developing effective registration and other processes 2. ASIC will work with the Australian Government to support the introduction of the Regulatory Initiatives Grid (RIG). The RIG will provide industry with information, in a single location and from across multiple agencies, about upcoming reforms and regulatory actions that will materially affect the financial sector.

A new standard agreed by general insurers will provide additional clarity & certainty for customers when independent expertise is required to help determine a claim. The Expert Report Best Practice Standard has been developed by the Insurance Council of Australia to provide consistency when insurers are using reports by experts such as hydrologists, engineers, builders, or specialist tradespeople. The best practice standard has been developed using feedback provided by consumer advocates and AFCA. An Expert Report is a report produced by an External Expert as defined in the GI Code of Practice. The ICA will be recommending to the independent Code Review Committee that the Standard is referenced in the next version of the Code to provide additional certainty and rigour around the use of Expert Reports. The Standard contains the following requirements: 𝙋𝙧𝙚-𝙧𝙚𝙥𝙤𝙧𝙩 𝙘𝙤𝙢𝙢𝙞𝙨𝙨𝙞𝙤𝙣𝙞𝙣𝙜 1. Relevant expertise – prior to an expert report being commissioned, insurers must ensure the expert being briefed is relevant, qualified, & objective 2. Capacity – The insurer should confirm that for each report commissioned the expert has the capacity to provide an expert report to the highest possible standard. 3. Briefing – The insurer should ensure that the expert has been fully briefed on relevant matters relating to the claim. 4. Advice to customers – The insurer should ensure that the customer is informed about the need to seek an expert report, the intended scope & use of the report, & is provided an opportunity to consider the need to submit any evidence to the insurer or expert in the commissioning process. 5. Exclusions – the insurer should make it clear to the expert exactly what they want the expert to provide an opinion on by including specific questions 𝙏𝙝𝙚 𝙧𝙚𝙥𝙤𝙧𝙩 𝙞𝙩𝙨𝙚𝙡𝙛 Insurers should ensure that reports: – are neutral & in plain english – formatted with conclusions – consider all relevant matters – rely only on facts – provide clear & cogent reasoning – clear on whether an opinion is tenative or firm – identify the cause(s) contributing to the loss – provide a statement of objectivity – provide the expert’s qualifications 𝙐𝙨𝙚 𝙤𝙛 𝙩𝙝𝙚 𝙧𝙚𝙥𝙤𝙧𝙩 – the expert report should be considered by claims managers & critically examined – provided to the customer & the insurer should explain which parts of the report have been relied on for the claim decision & why – disregard any statements or opinions outside of the scope or expert’s expertise

Underwriting Agencies continue to play an important role in the Australian GI market. Underwriting Agencies (UA) provide specialist skills & services, often filling gaps with niche products. By nature, UA are agile & provide a mechanism for the industry to innovate through technology. UA can also assist in the growth & development of people competencies & skill-sets 𝘾𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝙘𝙤𝙣𝙨𝙞𝙙𝙚𝙧𝙖𝙩𝙞𝙤𝙣𝙨 UA are a core client segment for me. I provide AFS Licensing, risk & compliance frameworks, training & education together with general compliance advice. There are some unique compliance considerations for UA: 1. A UA may initially focus on underwriting & defer claims to their insurer partner or TPA. This brings benefits by being able to tap into wider expertise however it’s important that dedicated claims staff are appointed to manage the UA claims so that the UA market proposition & brand values are not compromised 2. Complaints. It’s important to triage new complaints to understand whose licence(s) the complaint falls under. If the UA has all AFSL authorisations (advice, issuing & claims) the complaint will be against the UA, & any referral to insurers, claim managers or Lloyds Australia (to tap into their skill-set) is done so on an outsourced basis. 3. Insurers have various obligations to monitor a UA (under AFSL, Code & CPS 230). This should be through initial due-diligence & the ongoing provision of data rather than constantly looking over the shoulder of the UA. 4. UA should push back when insurers try to implement an APRA regulated risk management system on the UA. UA compliance arrangements must be tailored & based on the nature, scale & complexity of the UA. 5. A UA should be a member of Underwriting Agencies Council (UAC), ensuring that they have a strong voice at the table to provide input for regulatory change & GI Code issues. 6. Excel spreadsheets & word docs are more than adequate to manage compliance at smaller UA. Automation & complex risk management practices are a factor of size & should be considered as the UA grows. 7. UA should adopt 3 lines of defence, risk maturity matrix & risk appetite statements to enable management to better manage risks. However, adopt the principle & tailor to the size of the UA 8. Unless large, most UA will default compliance to the COO or similar. It’s critical that business leaders manage compliance, with the COO providing support. Usually the COO will tap into someone like myself for more specialised compliance expertise 𝑼𝒏𝒊𝒒𝒖𝒆 𝒄𝒐𝒎𝒑𝒍𝒊𝒂𝒏𝒄𝒆 𝒄𝒉𝒂𝒍𝒍𝒆𝒏𝒈𝒆𝒔 𝒇𝒐𝒓 𝑼𝒏𝒅𝒆𝒓𝒘𝒓𝒊𝒕𝒊𝒏𝒈 𝑨𝒈𝒆𝒏𝒄𝒊𝒆𝒔 Underwriting Agencies are a critical part of our General Insurance industry & are very exciting to be part of. However, they present unique compliance challenges that must be understood & managed.

A common question I’m asked is the timing to provide disclosure documents & other notices. The source of the obligation – Act, Regs or Code includes the timing & content requirements for each document & by whom & to whom provided. The requirements depend on the type of client (retail or wholesale), what you do & who you represent (broker representing an insured or MGA/TPA representing an insurer, or an insurer). 𝗦𝘂𝗺𝗺𝗮𝗿𝘆 𝑭𝑺𝑮 An AFS Licensee or their AR must give a FSG to a retail client as soon as practicable after it becomes apparent that a financial service will be provided to that client & before a financial service is provided. It is industry best practice to provide an FSG to wholesale clients. Insurance brokers should be aware that an FSG may be given after the services have been provided in ‘time critical’ cases such as an impending policy due date (4pm). Brokers can also provide the ‘Terms of engagement’ (part 4.2 Brokers Code) at the same time as providing an FSG. Insurance Claims Managers do not need to provide an FSG (as they act for insureds) but Claimant Intermediaries must. 𝗦𝗢𝗔 A Statement of Advice must be provided where personal advice is provided to a retail client for sickness & accident & CCI insurance products. The SOA must be provided when or as soon as practicable after providing the advice. 𝗚𝗲𝗻𝗲𝗿𝗮𝗹 𝗮𝗱𝘃𝗶𝗰𝗲 𝘄𝗮𝗿𝗻𝗶𝗻𝗴 A GAW must be provided at the same time & in the same format as when general advice is provided to retail clients. If the GA is provided on a website or in a document the GAW must be included. 𝑷𝑫𝑺 Generally, a product issuer (insurer or MGA) must provide a PDS to a retail client when making an offer (quote) or sale. A broker should ensure a PDS is provided when making a recommendation to a retail client to buy an insurance product. 𝑻𝑴𝑫 A TMD must be made publicly available before any person distributes a financial product that is subject to the design & distribution obligations ie ‘retail product distribution’. Generally the TMD is available on issuers websites with links provided in relevant documents. 𝑪𝒂𝒔𝒉 𝑺𝒆𝒕𝒕𝒍𝒆𝒎𝒆𝒏𝒕 𝑭𝒂𝒄𝒕 𝑺𝒉𝒆𝒆𝒕 & 𝑪𝒐𝒏𝒇𝒊𝒓𝒎𝒂𝒕𝒊𝒐𝒏 𝒐𝒇 𝑻𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏𝒔 A CSFS must be provided by insurers (or TPA) to retail clients before a cash payment is made where there are other legally available options to settle the claim. A CoT must be provided as is reasonably practicable after the transaction with the retail client occurs & includes acceptance & settlement of an insurance claim. A CSFS may be provided up to 5 days after the payment in cases of ‘immediate need’. A CSFS or CoT is not required in family violence situations. 𝑼𝑭𝑰 Brokers must provide a written notice to a client when placing business with an Unauthorised Foreign Insurer when relying upon 1 of the 4 exceptions. Contact me to understand all your disclosure & notices obligations.