21 June 2007

Strengthening Consumer Protection in Insurance

“The Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Bill 2007 was introduced into Parliament this morning” the Minister for Revenue and Assistant Treasurer, the Hon Peter Dutton MP, said today. 

Under the Bill, foreign insurers providing general insurance products in Australia either directly or through the actions of another (for example, an insurance agent or broker) will be required to be authorised by the Australian Prudential Regulation Authority, and comply with Australia’s risk-focused prudential framework.

“Australia will continue to welcome well managed foreign insurers. Exemptions from these arrangements will be developed in close consultation with stakeholders, enabling Australia’s largest businesses and those unable to obtain appropriate cover domestically to access the world insurance market,” Mr Dutton said.

“This will mean that Australian businesses can continue to insure their business risks and will encourage domestic insurers to provide innovative products that meet the needs of Australian consumers and businesses.”

The Bill will also subject DMFs to a rigorous and compulsory information collection, to enable Government, regulators and industry to better understand their use and operation.  Within three years of the start of this collection, the Government will review the operation of DMFs to determine whether prudential regulation is necessary.

“I would like to thank all the stakeholders involved in the development of these measures and welcome further input from industry on the implementation of the proposals” Mr Dutton said.