A response to ASIC in October by the Australian Automotive Dealer Association on the sale of add-on insurance and warranties made it clear it would support reform proposals that lead to better consumer outcomes, informed decision making, improved sales processes, greater transparency and more competition.
The AADA submission states that to reduce market distortions ASIC should look beyond the dealership channel and implement proposals across all distribution channels that include novated leasing companies, banks and credit unions.
ASIC has proposed a deferred sales model for the sale of add-on insurance. In particular it has sought feedback on the commencement and duration of the deferral period.
The AADA submission recommends a deferral period should commence as soon as the consumer communication is received, be as short as possible and give the consumer the opportunity to opt-out.
The submission stated the process should not distinguish between a new or used car and the model should apply uniformly to all add-on products.
The AADA submission addressed 26 detailed questions put by ASIC covering every aspect of add-on insurance. ASIC has been seeking feedback by stakeholders on the proposed direction.