The peak body representing Australia’s franchised new car Dealers has expressed concern over ASIC’s proposed intervention in the automotive add-on insurance market.
ASIC’s proposed intervention comes as the Treasury is leading work on the establishment of whole of economy reforms to the sale of add-on insurance.
“We don’t believe the automotive industry should be singled out for special attention, given that Treasury has recently put forward sweeping proposals for all add-on insurance products,” said AADA CEO James Voortman.
“ASIC’s proposals for the automotive industry go over and above what the Treasury are proposing, by limiting the opportunity for an informed consumer waiver and introducing additional procedures into the sales process,” said Mr Voortman.
“We understand ASIC’s concerns about consumer detriment, but as they note in their paper, this is largely a result of poor product design rather than the sales channel through which such products are sold,” he said.
“ASIC’s scrutiny of these products in recent years has had the desired effect, leading to a capping of commissions and resulting in many insurers withdrawing from the market,” he said.
“We would hope that by aligning the automotive industry with the rest of the economy, new car Dealers will be able to assist customers that have genuine need for appropriate insurance products,” he said.
The AADA has lodged its submission to ASIC and is looking forward to raising its concerns directly with ASIC through the consultation process going forward.