Introduced into Parliament today, the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020 addresses 20 recommendations and one additional commitment from the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
In a statement, Treasurer Josh Frydenberg outlined that some of the protections for financial services customers under the bill include:
- strengthening the unsolicited selling (anti-hawking) provisions, including for superannuation and insurance products, to prevent pressure selling to customers;
- introducing a deferred sales model for add-on insurance products, to promote informed purchasing decisions and prevent inappropriate sales of add-on insurance;
- making the handling and settlement of insurance claims a ‘financial service’, which will require insurers to behave honestly, efficiently and fairly and comply with other licensing obligations, to improve claims handling practices;
- prohibiting the trustee of a superannuation fund from having a duty to act in the interests of another person, other than those arising from their duties as trustee of a superannuation fund; and
- allowing provisions in financial services industry codes to be enforceable, with breaches attracting civil penalties, ensuring better adherence by industry and certainty for customers.
Mr Frydenberg said the legislation is another major step forward in completing the implementation of the Hayne royal commission.
“These changes will be complemented by providing further clarity regarding the role of the regulators and enhancing the requirements of financial institutions reporting breaches of the law which will ensure significant misconduct is reported and investigated sooner,” he said.
“With the introduction of these recommendations, the government is now focused on completing implementation of the remaining recommendations of the Hayne royal commission consistent with the updated implementation roadmap issued following the onset of COVID-19.”
Australian Banking Association chief executive Anna Bligh said implementing the changes remains a priority for the banks, and significant steps have already been taken to respond to the recommendations.
“Australian banks have already been acting on the findings of commissioner Hayne and remain fully engaged for this next phase,” Ms Bligh said.
“Banks have partnered with the government during the pandemic to support customers and the economy and look forward to continuing that engagement as the royal commission legislation is considered.”