A Regulated Industry

The general insurance industry in Australia is governed by a number of laws (most importantly the Insurance Act 1973, the Insurance Contracts Act 1984 and the Corporations Act 2001)

The two key regulators are the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.

APRA sets prudential standards for the general insurance industry. For example, it determines how much capital an insurer must hold in reserve to pay claims, and this in turn can have a significant impact on the premium an insurer must charge.

ASIC is responsible for licensing financial services providers, including those who offer insurance and provide advice on these products. It also regulates consumer protection in the financial services industry as well as regulating investment banks and finance companies.

Insurance companies must abide by various other laws and regulations. For example, they are bound by Australia’s privacy laws to protect the confidentiality of information they gather.

More insight on regulation