In a recent speech to the Insurance Council of Australia, ASIC Chair Jeffrey Lucy observed that:
- One of ASIC’s continuing areas of focus is the quality and reliability of product disclosure, including advertising. Some PDS’s are not adequately updated with information about some of the significant benefits, characteristics or features of the product when products are enhanced with new features, and do not meet the disclosure requirements in the Corporations Act.
- ASIC had concerns about insurers advertising that they had the ‘cheapest’ or ‘lowest’ price in these cases when the comparisons were based on different assumptions to those made by competitors.
- ASIC also had issues regarding advertising ‘maximum no claim discounts’ or ‘rating 1 for life’, which represented that an actual accident would not affect the premium when in fact it may.
- new product disclosure requirements for general insurance products will commence on 21 June 2007.
- ASIC recently extended its transitional relief for issuers of general insurance products from the dollar disclosure requirements in PDSs from 1 April 2007 to 30 June 2008.
