The key commitments ASIC are seeking from insurers are:
- A significant reduction in the amount of commissions paid to anyone who on-sells an add-on insurance product through car Dealers
- A significant improvement in the value offered by these products, through substantial reductions in price and better product design and cover
- A move away from single upfront premiums that are financed through the loan contract, given the adverse financial impact this has on consumers
- Providing refunds to consumers who have been sold policies in circumstances that were unfair, such as where a policy has been sold to a consumer who was never eligible to claim under the policy.
Insurers have notified ASIC that they intend to implement a 20 per cent cap on commissions and also provide ASIC on a regular basis with data on prices, premiums and claims so that ASIC can monitor the impact of changes on consumers