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October 12, 2016
The first ‘root and branch’ review of the Australian financial system since the Wallis inquiry 17 years ago is currently underway. Submissions to the financial system inquiry (aka Murray inquiry) closed on 31 March and the insurance industry was well represented in the submission process with NIBA, ICA and insurers providing their observations and recommendations.
The inquiry’s terms of reference were deliberately broad and provided an important opportunity for the industry to highlight the main developments since the Wallis inquiry, particularly in relation to technological changes and the move towards granular/risk-based pricing for certain types of cover. Several submissions, including IAG’s, highlighted the importance of the advice model and the value proposition of brokers and financial advisers.
Some of the other key recommendations advanced by the industry included the need for legislation to facilitate use of shorter and more tailored disclosure documents, reductions in regulation and compliance costs for the provision of advice, the drivers of insurance affordability and accessibility, industry and government to invest in financial literacy programs cognisant of technological advances and consumer preferences.