Most planning groups OK on PI obligations
Australian financial planning groups are mostly meeting their obligations with respect to holding appropriate professional indemnity (PI) insurance, according to the Australian Securities and Investments Commission (ASIC).
A review conducted by the regulator found that of the 56 licensees it reviewed, three did not have PI insurance that complied with the defence costs requirements and those three licensees had subsequently obtained the improved PI insurance or were in the process of doing so.
ASIC announced that its targeted review of PI insurance by ASIC had found that most small companies holding Australian financial services (AFS) licences had PI insurance that met regulatory requirements.
“We found, generally, the small AFS licensees that we reviewed had policies with an overall indemnity limit that complied with requirements,” the regulator said.
ASIC said its review had focused on the adequacy of cover for defence (legal) costs, and fraud and dishonesty, in the policies offered by two insurance companies to small AFS licensees and had followed on from its 2016 report which had highlighted these as areas of concern.
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
