The Financial Sector Reform (Hayne Royal Commission Response) Bill 2020 passed both houses of Parliament on 10 December, following its initial introduction into Parliament in November.
The bill addresses 20 recommendations and one additional commitment from the final report of the royal commission run by commissioner Kenneth Hayne.
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.
Treasurer Josh Frydenberg said the legislation is another major step forward in completing the implementation of the Hayne royal commission recommendations.
“These changes are 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,” Mr Frydenberg said.
“The government remains focused on completing implementation of the remaining recommendations of the Hayne royal commission.”