Rural & General attracts more regulator attention
Insurer Rural & General Insurance Broking has attracted more regulatory attention, this time from theAustralian Securities and Investments Commission(ASIC), over concerns that its website may be misleading and deceptive to consumers.
ASIC has obtained undertakings from Rural & General Insurance Broking and Rural & General International Insurance through the Federal Court in Sydney to remove representations on the website which may have caused consumers to believe that the latter was able to operate as an insurer in Vanuatu without restriction.
While Rural & General International Insurance is incorporated in Vanuatu, theAustralian Prudential and Regulation Authority(APRA) claimed in a warning to consumers earlier this year that it was not authorised to insure any risks within Vanuatu or to solicit insurance business from the public within or beyond Vanuatu, but was thought to be actively selling insurance policies in Australia through Rural & General Insurance Broking.
This was disputed by Rural & General, which has since launched two defamation actions against APRA - the first, aborted in the District Court of NSW because of a change to jurisdiction legislation resulting in a second action being filed last month in the ACT Supreme Court.
Under these new undertakings, Rural & General Insurance Broking has agreed to send a corrective notice to every person or entity who or which purchased an insurance product through its website between November 23 2002 and March 31 2003, and to publish a corrective notice on the website in a form acceptable to ASIC.
ASIC deputy executive director of enforcement Jan Redfern says, “People should be aware there are some risks involved in placing their insurance with unauthorised foreign insurance companies, and urges all consumers to check whether they are protected in Australia if something goes wrong”.
Rural & General was also ordered to pay ASIC’s costs.
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
