David Blackhall

THE Australian Automotive Dealer Association (AADA), while welcoming Australian Securities and Investments Commision (ASIC) report on car dealer insurance products, has questioned the commission’s “highly selective approach”.

AADA CEO David Blackhall said: “Our members believe that sound regulatory frameworks require consistency, equity and fairness across all products and channels within a particular sector – in this case the insurance industry.

“The singling out of some point-of-sale ‘add on’ products and the exclusion of others – for example comprehensive insurance – is concerning for our members,” he said.

GoAutoNews Premium has independently found that the government agency responsible for insurance matters, the Australian Prudential Regulation Authority (APRA), regularly produces reports on insurance matters, including add-on insurance products that are the subject of ASIC’s report.

APRA’s data on insurance products, on its website, includes all insurance products that have add-on policies at the point of sale.

These include motor vehicle comprehensive insurance that is not considered in ASIC’s report on car dealers. Yet both are charged to the consumer in an identical manner.

David Blackhall

It appears ASIC did not consult APRA to gain full details of the insurance industry and the frequent use in other sectors of add-on insurance charged at the point of sale.

In response, the AADA said it was concerned that ASIC may not have taken all factors into account when making decisions about the car retail industry.

“Our members consider that they have always complied with the regulatory requirements imposed by ASIC, APRA and ACCC in all aspects of their business operations, including the sale of insurance products,” Mr Blackhall said.

“Motor dealers sell insurance products created by the insurance industry at premiums nominated by the insurers on the relevant rate cards.”

Mr Blackhall said he was also disappointed at the low level of direct dealer consultation from ASIC during the three-year study.

“This lack of engagement stands in direct contrast with ASIC’s handling of other important matters impacting franchised car dealers,” he said.

Mr Blackhall said the AADA welcomes the opportunity for further productive dialogue on insurance with the ASIC team in the future.

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