CORANGAMITE federal member Sarah Henderson has taken aim at the market regulator for a lack of action following contentious insurance claims following the bushfires at Wye River and Separation Creek.<\/p>\n
Insurance companies including Suncorp\u2019s subsidiary AAMI Insurance have been criticised for their slow reaction in paying out complete replacement\u00a0cover claims to people whose homes were lost in the bushfires, including payouts that were up to $500,000 short of what was needed for a rebuild.<\/p>\n
Ms Henderson spoke out several times on the issue, which the federal government eventually referred to the Australian Securities and Investments Commission (ASIC).<\/p>\n
She raised the issue again in her capacity as chair of the Parliamentary Standing Committee on Economics, which questioned ASIC in Canberra on Friday.<\/p>\n
In a statement after the public hearing, Ms Henderson said that while ASIC found that AAMI Insurance had misled consumers and fined the insurer accordingly, she was disappointed in ASIC\u2019s response.<\/p>\n
\u201cI do not believe that ASIC ever appropriately addressed AAMI\u2019s conduct.<\/p>\n
\u201cIf changes in the law were required, why didn\u2019t ASIC say something at the time?<\/p>\n
\u201cInsurers should not be allowed to get away with ripping off consumers, as AAMI attempted to do,
\nparticularly those people who suffer loss and trauma in a natural disaster.\u201d<\/p>\n
In the hearing, ASIC\u2019s Michael Saadat said the commission \u201cconsidered all of the regulatory options that were available to us\u201d.<\/p>\n
He said claims handling was not a financial service over which ASIC\u2019s jurisdiction applied, as there was
\nan exemption that an insurer\u2019s claims handling did not have to meet the requirement of being efficient, honest or fair (unlike all other financial service activities under the Corporations Act).<\/p>\n
\u201cWe highlighted that in 2016 when we did a review of life insurance claims handling, and we made a recommendation to the government that the government remove that exemption.<\/p>\n
\u201cThe government has accepted that recommendation but is now awaiting the royal commission before proceeding with the removal of that exemption.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
CORANGAMITE federal member Sarah Henderson has taken aim at the market regulator for a lack of action following contentious insurance claims following the bushfires at Wye River and Separation Creek. Insurance companies including Suncorp\u2019s subsidiary AAMI Insurance have been criticised for their slow reaction in paying out complete replacement\u00a0cover claims to people whose homes were […]<\/p>\n