The package, which was introduced on Thursday, addresses 20 recommendations and one additional commitment from the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The reforms being introduced are aimed at further strengthening protections for consumers in a range of areas including superannuation, insurance and financial services.
In a statement, Treasurer Josh Frydenberg said the reforms will strengthen the unsolicited selling (anti-hawking) provisions, including for superannuation and insurance products, to prevent pressure selling to consumers.
The reforms will also introduce a deferred sales model for add-on insurance products, to promote informed purchasing decisions and prevent inappropriate sales of add-on insurance and make the handling and settlement of insurance claims a “financial service”, which will require insurers to behave honestly, efficiently and fairly comply with other licensing obligations, to improve claims handling practices.
They will also prohibit the trustee of a superannuation fund from having a duty to act in the interests of another person, other than those arising from their duties as trustee of a superannuation fund.
Mr Frydenberg said the reforms will also make provisions in financial services industry codes enforceable, with breaches attracting civil penalties, ensuring better adherence by industry and certainty for consumers.
“These changes will be complemented by providing further clarity regarding the role of the regulators and enhancing the requirements of financial institutions reporting breaches of the law which will ensure significant misconduct is reported and investigated sooner,” Mr Frydenberg said.
“With the introduction of these recommendations, the government is now focused on completing implementation of the remaining recommendations of the Hayne royal commission consistent with the updated implementation roadmap issued following the onset of COVID-19.”
