THE Joint Select Committee on Implementation of the National Redress Scheme has agreed that the next stage of its ongoing inquiry and second interim report will give close examination to the following areas:

• Ongoing survivor experience;
• Operation of the National Redress Scheme, including decision-making frameworks and processes;
• Provision of legal advice to survivors;
• Survivor and institution participation in the scheme; and
• Responses from jurisdictions and others to the Committee’s first interim report.

The Committee is currently receiving submissions to inform the second interim report and anticipates that public hearings will take place in September 2020. A program of public hearings will be made available in due course from the website.

The Committee is aware that its inquiry work will be taking place at the same time as the legislated two year anniversary review of the National Redress Scheme currently being supported by the Department of Social Services.

The Committee wishes to clarify that the two processes are separate, the legislated two year anniversary review will report to government, and this Joint Parliamentary Committee will continue to report to the Parliament.

The Committee wishes to assure survivors who participate or contribute to the second interim report that all requests for confidentiality will be respected.

Further detail on each focus area is available on the Committee website.

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THE Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) will appear before the House Economics Committee at a public hearing on Wednesday, August 5, 2020 as part of the committee’s reviews of the 2019 APRA Annual Report and 2019 ASIC Annual Report.

Chair, Tim Wilson MP, said, "Despite COVID-19 we are getting on with the job — the hearing will provide the committee with the opportunity to scrutinise APRA and ASIC on their performance and operation.

"The COVID-19 pandemic has created unprecedented disruption and uncertainty in the financial sector. Now, more than ever, it is essential to maintain strong prudential regulation and ensure fair and transparent dealings to safeguard financial stability and consumer trust in the financial sector."

"The committee will scrutinise APRA on how it promotes financial stability through the prudential regulation and supervision of ADIs, insurers and superannuation licensees and will scrutinise ASIC on its enforcement strategy and supervisory approach.

"ASIC’s capability is of particular interest after recent data exposed errors in their SMSF fact sheet that should have been identified with basic critical reasoning."

Public hearing details

The hearing will be broadcast live at aph.gov.au/live.

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THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell said there had been an overwhelming public response to the Insurance Inquiry since it was launched last week.

“My office has already received over 150 survey responses and a number of submissions in relation to this inquiry and we anticipate that number to grow,” Ms Carnell said..

“While we are only in the early stages of the inquiry, it is clear the small business community supports the work we are doing in this area.”

The inquiry follows a growing number of complaints from small businesses who have either been denied insurance or priced out of the market.

“Over the coming months, we will be investigating the practices of the insurance industry that impact small businesses and examining whether small business insurance products are fit for purpose,” Ms Carnell said.

“I’m particularly concerned about a number of cases where small businesses with current insurance policies have been subjected to major changes that have reduced their coverage without their consent, and with no refund of premiums. Our inquiry will look at this in more detail and consider if these practices amount to Unfair Contract Terms.

“We remain very keen to hear from small and family businesses that have faced difficulties with their insurance provider," Ms Carnell said.

“I encourage these businesses to share their experiences by completing our online survey or emailing my office via This email address is being protected from spambots. You need JavaScript enabled to view it. by 30 August, 2020.

“We also welcome submissions from industry stakeholders, which can be emailed to This email address is being protected from spambots. You need JavaScript enabled to view it. by 21 August, 2020.”

A final report is expected to be released in December.

www.asbfeo.gov.au

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AS LIFE INSURANCE awareness week and the Financial Services Council (FSC) life insurance summit comes to an end today, the key take outs from the week is that the sustainability of the industry is on a knife edge with the rise of mental health claims being a major contributing factor.

FSC senior policy manager for life insurance, Nick Kirwan said, “In Minister Jane Hume’s opening remarks, she outlined that the government was willing to consider allowing life insurers to pay for treatment as an early intervention measure, particularly in relation to mental health-related claims."

This week the FSC released life insurance claims data from 2019 confirming mental illness is now the highest cause of claim for total permanent disability (TPD) and the third highest for income protection. Together, life insurers paid $1.24 billion in 2019 to over 9,500 Australians for these mental health claims

“If this reform were to be legislated it would allow life insurers to reduce the cost of mental health claims, improving the sustainability of the industry and reducing the cost for life insurance customers," Mr Kirwan said.

“Early intervention helps consumers recover from mental health issues, and consumers that recover quicker in turn helps the industry manage its sustainability and affordability – it’s all linked.

“We want a healthy and sustainable life insurance sector with the three A’s for consumers: availability of products; affordability of cover; and assurance that every valid claim will be paid,” Mr Kirwan said.

Lifeline on 131 114, Beyond Blue on 1800 512 348.

About the Financial Services Council

The Financial Services Council (FSC) has over 100 members representing Australia's retail and wholesale funds management businesses, superannuation funds, life insurers, financial advisory networks and licensed trustee companies. The industry is responsible for investing almost $3 trillion on behalf of more than 15.6 million Australians. The pool of funds under management is larger than Australia’s GDP and the capitalisation of the Australian Securities Exchange and is the fourth largest pool of managed funds in the world.

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