Regulatory Initiatives Grid - December 2024 - General Insurance

Treasury has released The Regulatory Initiatives Grid - Edition 1 . The RIG lists announced and publicised regulatory reform priorities and initiatives that will materially affect the financial sector over the next 2 years.

Access the RIG here

This is an excellent intitiative.

Regulatory Initiatives that have relevance for General Insurance, as at December 2024

1. Delivering Better Financial Outcomes - tranche two - Quality of Advice

In December 2023, the Government announced its final response to the Quality of Advice review – the Delivering Better Financial Outcomes package. The reforms aim to increase the affordability and accessibility of financial advice by reducing red tape and modernising the regulatory framework. Legislation delivering the first tranche of reforms passed in July 2024. Legislation implementing the second tranche of reforms will be introduced following public consultation.

ASIC intends to issue regulatory guidance to assist implementation of the legislation.

Q1 2025 - Consultation on exposure draft legislation (second tranche of reforms)

2. Update of Regulatory Guide 183 Approval of financial services sector codes of conduct

ASIC will update Regulatory Guide 183 Approval of financial services sector codes of conduct, to consider changes such as reforms following the Financial Services Royal Commission to make certain parts of industry codes ‘enforceable code provisions’ and for ASIC to designate those provisions.

Q3 2025 - Consultation commences H1 2025 - Updated guidance published

3. Insurance claims handling and floods

ASIC will undertake reviews of selected insurers’ compliance with their obligations in relation to claims handling (detailed in Information Sheet 253). Specifically, this will include:

• a review of general insurers’ implementation of recommendations in Report 768 Navigating the storm: ASIC's review of home insurance claims (including communication, project management and the treatment of vulnerable customers); and
• follow up work arising from the Parliamentary Floods Inquiry.

Q1 2025 - Compliance monitoring Q2 2025 - Compliance monitoring

4. Update of Regulatory Guide 168 Product Disclosure Statements (and other disclosure documents)

ASIC will undertake a comprehensive update of Regulatory Guide 168 Disclosure: Product Disclosure Statements (and other disclosure obligations), including consideration of changes resulting from the Delivering Better Financial Outcomes reforms.

Q2 2025 - Consultation commences Q4 2025 - Updated guidance published

5. Update of Regulatory Guide 181 Licensing: Managing conflicts of interest

ASIC will update Regulatory Guide 181 Licensing: Managing conflicts of interest, including consideration of case law and law reform (including penalties for breaching the conflicts management obligations).

Q3 2025 - Consultation commences H1 2025 - Updated guidance published

6. Financial Accountability Regime (FAR)

The FAR extends the former Banking Executive Accountability Regime to insurers and superannuation entities. The FAR will apply to insurers and superannuation entities from 15 March 2025.

Q1 2025 - Applies to all entities from 15 March 2025

7. Climate-related financial disclosures

The Government is implementing mandatory climate related financial disclosure requirements for large businesses and financial institutions. Legislation received Royal Assent on 17 September 2024 and requirements will phase in for different sized entities, commencing 1 January 2025. ASIC proposes to publish a regulatory guide to help reporting entities comply with the new sustainability reporting obligations and to explain ASIC’s approach to administration of the regime.

Q1 2025 - Applies to financial years commencing 1 January 2025. Updated guidance published.

8. Insurance standard cover and standard term reforms

Treasury consulted on changes to the standard cover regime and/or implementing standard definitions for several claim related terms in insurance contracts to improve understanding and limit unintentional underinsurance. Consultation on options was completed in April 2024 and options are being considered.

Timing of any further work will be announced in due course.

9. Insurance monitoring

The ACCC is monitoring the prices, costs and profits of home, contents, strata, and certain commercial insurance policies, before and after the introduction of the cyclone reinsurance pool. The ACCC is required to report at least once each calendar year until 30 June 2026. 

Q4 2025 - Reporting requirement for 2025 due by end of calendar year H1 2026 - Final report due by 30 June 2026

10. Governance

APRA will conduct a broad review of governance requirements to ensure that the prudential framework remains fit for purpose. The review will include those requirements set out in:

• Prudential Standard CPS 510 Governance (CPS 510)
• Prudential Standard CPS 520 Fit and Proper (CPS 520)

Q1 2025 - Consultation - discussion paper Q4 2025 - Consultation - draft standards H1 2026 - Prudential standards updated

11. Climate risk

APRA will consult on amendments to Prudential Standard CPS 220 Risk Management (CPS 220) to embed climate related financial risk considerations more clearly.

Q2 2025 - Consultation - TBC Q4 2025 - Prudential standard updated H2 2026 - Amendments to take effect

12. General insurance reinsurance: Review reinsurance prudential requirements

APRA will consult on reinsurance settings for general insurance to consider the scope to promote access to alternative reinsurance.

Q2 2025 - Consultation Q4 2025 - Prudential requirements updated H1 2026 - Commences in June 2026