APRA, ASIC flag early gains in life insurance disclosure reforms

Efforts to reduce premium volatility through product design remain in early stages.

The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have released an update on the progress life insurers and friendly societies have made in addressing concerns around premium increases, product design, and marketing and disclosure practices.

The regulators first raised these issues in December 2022, and followed up again in December 2023, after identifying frequent, large, and unexpected premium increases that may not have aligned with policy terms or met reasonable policyholder expectations.

According to the latest review, improvements have been made in re-rating practices, disclosure and marketing materials, and product governance. 

However, efforts to reduce premium volatility through product design remain in the early stages. Given the recent implementation of these measures, APRA and ASIC said it is still too soon to evaluate their full impact on stabilising premium increases.