Regulatory Rumbles: Can an issuer be held liable for a distributor’s conduct?

Increasingly, ASIC has sought to hold product issuers responsible for the conduct of other entities down the distribution chain. The recent case of ASIC v Diversa Trustees Limited [2023] FCA 1267 (Diversa) is an example of this. In this edition of Regulatory Rumbles, we explore this trend and examine the legal bases for holding product … Read more

BACK TO BASICS: INSURANCE CLAIMS HANDLING AND THE KEY CONDUCT OBLIGATIONS

Claims handling in insurance is currently a key focus of ASIC, with ASIC Deputy Chair Karen Chester recently calling for action from insurers to get the basics right and warning of the risks of enforcement action. ASIC has indicated it is closely monitoring claims handling processes and has already commenced several investigations across the insurance … Read more

ASIC commences first court action on unfair contracts terms in insurance

Last week, ASIC commenced the first court proceedings alleging unfair contract terms in an insurance contract. The case involves standard form underwritten home and contents insurance contracts issued by Auto & General Insurance Company Limited (Auto & General). On 5 April 2021, the unfair contract term protections in Subdivision BA of the ASIC Act were … Read more

Fair game: Unfair contract terms in superannuation?

Sections 12BF-12BM of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) contain provisions designed to protect consumers and certain small business in respect of unfair contract terms in relation to their application to financial services (UCT Regime). The introduction of civil penalties in the UCT Regime in late 2022 and the flow-on … Read more

The substratum rule in superannuation

It is common for superannuation trustees to seek to amend the governing rules of a superannuation fund. This regularly occurs during fund and product rationalisation activity, successor fund transfers, and new product launches. The typical formula for assessing whether a trust deed amendment can be made by the trustee will involve: examining the amendment power … Read more

Efficiently, Honestly and (still) Fairly Uncertain – The Quest for Certainty

The continuing uncertainty around the provision requiring licensees to provide financial services ‘efficiently, honestly and fairly’ under section 912A(1)(a) of the Corporations Act (EHF provision) comes into sharpest focus against the backdrop of the new breach reporting regime. In this article, we examine some common questions and challenges we are seeing emerge in relation to … Read more

Insurance in superannuation: AFCA complaints directly against life insurers – A thing of the past?

The Decision Yesterday’s decision of the Full Federal Court in MetLife Insurance Limited v Australian Financial Complaints Authority Limited [2022] FCAFC 173 upheld MetLife’s contention that AFCA does not have jurisdiction to hear complaints made directly against life companies relating to life insurance in superannuation. The issue arose due to a specific complaint which was … Read more

Section 52(12) – The Forgotten Covenant

By Scott Donald PhD CFA (External Consultant and Associate Professor – UNSW) Rob Kardashian, Emilio Estevez, Luke Hemsworth, Dannii Minogue, Trevor Chappell.  Sometimes it is hard to avoid being overshadowed by more famous, more glamorous siblings. The covenant in section 52(12) of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) must be feeling that … Read more

State of Play: The unconscionable conduct yo-yo goes back to the High Court

We have previously written about the doctrine of unconscionable conduct, where we follow the developing law of both statutory and equitable unconscionable conduct. The yo-yo starts its first play with the 2019 High Court decision in ASIC v Kobelt, which created significant uncertainty in the doctrine of unconscionable conduct (see our article here).[1] Five separate … Read more