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Regulatory Update

N.Y. regulator touts need for consumer advocate and Australia acts on mis-selling of insurance products.
  • September 2019
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Life Insurance: Linda Lacewell, the superintendent of the New York state Department of Financial Services, urged the National Association of Insurance Commissioners to follow the state in incorporating consumer advocates in more of its work, just as the DFS is appointing a consumer advocate to work across divisions and “put the consumer at the center of everything we do.”

Speaking at the opening ceremony of the NAIC's summer meeting, she said the New York DFS became the first insurance regulator to implement a regulation requiring sellers of life insurance and annuities to act in the best interest of consumers when advising them.

Consumer Credit Insurance: The Australian Securities and Investments Commission has proposed to ban unsolicited phone sales of life insurance and consumer credit insurance as it aims to immediately stop the “mis-selling practices” ahead of the expected wider reform by the government.

The market conduct regulator had earlier identified ongoing sales issues with both insurance products. In its review of direct life insurance sales, ASIC noted pressure-selling techniques, poor product design and incentive schemes were causing an increasing number of customers to cancel their life insurance policies.

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