The FederalGovernment is gearing up to act in the key areas of professional indemnity insurance and the implementation of the Financial Services Reform Act (FSRA),according to Senator Ian Campbell, Parliamentary Secretary to the Treasurer.
Campbell, speaking at the Inaugural Financial Planning Week address in Melbourne last week, says the Government will convene a round table meeting of interested parties to look at the rising cost of professional indemnity insurance and its impact on the Australian financial services industry.
“Assistant Treasurer Helen Coonan has convened a round table meeting in the next few weeks and has advised me most states are now looking at tort law reform as a move to limit claims.”
The New South Wales Government has said it will look at amending tort laws as a way to reduce professional indemnity and public liability claims.
“Most insurers are looking at how they handle risk, and are pricing risk accordingly. However, clearly a planner cannot run a company that has just had a 600 per cent increase in its risk cover,” he says.
The Government is trying to come up with a solution to the problem, he says, and has recognised the urgency of the situation.
The senator is also convening his own round table meeting to look at issues raised by the implementation of the FSRA.
“Myself, the Australian Securities and Investments Commission (ASIC) and the industry are working closely to ensure the Act is implemented smoothly,” he says.
“It is important Australians have a range of investments, and entreprenurial companies can act and grow in an environment where regulators are friendly.”
The Financial Planning Association (FPA) will be a member of that round table, having raised a number of issues including the Act’s anti-hawking provisions.
Campbell says these will be discussed and ASIC is due to issue a policy paper in the next couple of weeks.
The problems with streamlining of licences will also be looked at the round table meeting, although Campbell says the extra funding for ASIC in the Budget will help to speed-up licence applications.
“The cost of applying for licences will be more expensive earlier on, but it will fall and ASIC will be putting more people on to implement the Financial Services Reform Act.”
