Lawyers have today welcomed the Federal Government’s announcement that it will release a consultation paper in order to act on enforceable provisions for industry codes of conduct in the financial services industry, saying the move was necessary because of the industry’s stubborn refusal to act on the common sense measure that would ensure improved standards for consumers.
Maurice Blackburn Superannuation and Insurance Principal Kim Shaw said enforceable codes of conduct had long been called for by stakeholders and were recommended by both the Hayne Royal Commission and the Productivity Commission, but the industry had repeatedly failed to act and the Federal Government’s intervention to enforce this vital reform was welcome.
“The industry has had to be dragged kicking and screaming to this reform, despite consulting and developing revised codes of conduct over a number of years,” Ms Shaw said.
“We have repeatedly criticised both the code governing insurance in super and the Financial Services Council’s (FSC) life insurance code for being completely inadequate, in our view both have not and will not provide adequate consumer protections without proper ASIC oversight and enforceability.
“Yet both groups have failed to act on this obvious and necessary reform to deliver ASIC approval and enforceability of their codes, despite numerous opportunities to do so.
“Groups like the FSC and other peak bodies should be taking a long, hard look at themselves today as to why it has had to get to this point – where a Productivity Commission report and the Hayne Royal Commission have called for such oversight but still they have failed to act, and the Federal Government is now stepping in to legislate to force their hand.
“We are relieved the Federal Government is now stepping up to legislate to ensure proper and long overdue oversight and enforceability of these industry codes, given the industry has made clear it cannot be relied on to do the right thing itself.
“Today’s announcement should serve as a final wake-up call to the industry – it is well past time to deliver codes of conduct that can do the job required to restore balance for consumers, and we welcome the Federal Government’s intervention to ensure this is acted on at last.
“We also welcome the proposal to ensure that any contraventions of ASIC-approved codes will amount to a breach of the law, as well as to ensure that if the industry fails to put forward its proposed enforceable code provisions in a timely way that mandatory codes will be imposed by the Government,” she said.