ASIC consults on proposed product intervention order for sale of add-on motor vehicle financial risk products

ASIC is seeking stakeholder feedback on a proposed product intervention order on the sale of add-on insurance and warranty products sold with motor vehicles.

ASIC is considering using its product intervention powers to address significant consumer detriment in this market.

Today’s release follows ASIC’s earlier consultation through Consultation Paper 324 Product intervention: The sale of add-on financial products through caryard intermediaries (CP 324), published in October 2019. The initial consultation sought views on ASIC’s proposal to use the product intervention power in Pt 7.9A of the Corporations Act 2001 to introduce a deferred sales model for the sale of add-on insurance and warranties by caryards.

ASIC also undertook additional work to consider the impact of the COVID-19 environment on the market in recent months.

The consultation process

Before making a product intervention order, ASIC must consult persons who are reasonably likely to be affected by the order: see s1023F of the Corporations Act.

In response to the submissions received to CP 324, ASIC has made a number of changes to the proposed product intervention order.

These changes are set out in detail in the attached documents and include a number of specific questions to assist consideration.

ASIC invites stakeholder feedback on these changes. The feedback will help ASIC consider whether, and if so how, to exercise the product intervention power.

Stakeholders who have difficulty meeting the timeframe for feedback please contact ASIC via the email below.

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