Today's banking Royal Commission final report will help to level the playing field for consumers in an industry that for too long has been skewed towards the interests of big banks, financial institutions and insurers according to Maurice Blackburn Lawyers.
Maurice Blackburn Superannuation and Insurance Law Principal Josh Mennen said the recommendations made by Commissioner Hayne would help finally to re-balance the interests of consumers within the financial services and insurance industries.
"Today's recommendations won't see a fundamental rewrite of the frameworks underpinning the financial services and insurance industries, but they will be pivotal in helping to tip the balance back towards consumers – something that is long overdue," Mr Mennen said.
"These recommendations will help to level the playing field by delivering much better negotiating power to consumers in the products and services they are paying for across a range of areas, including mortgage broking and insurance.
"We particularly welcome the call for an unfair contracts regime for life insurance as a major win for consumers.
"It is crucial that consumers can have confidence that if they enter into a life insurance policy in good faith that this won't be avoided – as we have seen time and again insurers use all sorts of excuses to avoid paying out insurance on valid claims and this must end.
"Similarly the Royal Commission's recommendation of enforceable code provisions with respect to the Life Insurance Code of Practice is welcome, as is the call for sanctions to be imposed on any insurers who breach the code.
"For any code to have teeth it must be enforceable with ASIC oversight – we have repeatedly called for this as the current life insurance code of practice has all the bite of a wet lettuce.
"The industry has largely ignored our calls for a robust code, and hopefully today's report is a further wakeup call that the public will not stand for such a lax approach to a code of practice.
"The recommendation that trustee breaches of the Superannuation Industry (Supervision) Act (SIS) be met with a civil penalty is also welcome, this is clearly needed after the Royal Commission exposed retail super funds for fee gouging and other practices that put profit before their members.
"We also welcome the call to ban commissions for mortgage brokers which have led to countless consumers being granted excessive unsustainable debt.
"Financial advisers have long been banned from collecting such commissions but somehow mortgage brokers have continued to ride the training commission gravy train with minimal scrutiny and this recommendation will help to ensure the law can now similarly catch up with respect to the mortgage broking industry.
"We also welcome the much-needed recommendation of a compensation scheme of last resort to compensate those victims of negligent financial advisers who have gone bust and can't pay up – we have made repeated calls for this to numerous reviews over the years and there has been no good reason to not act on it.
"We are pleased to see that the Federal Government at last are now establishing this in light of the Royal Commission's report and we welcome its undertaking to have the scheme compensate losses dating back to 1 January 2008.
"Finally, it must be acknowledged that this Royal Commission would not have happened or uncovered the many shocking stories it has without the significant contribution of whistleblowers.
"This inquiry has shown more than ever why strong whistleblower protections are crucial in Australia to clean-up corporate misconduct, and we continue to support reforms to deliver this including a reward scheme for those who speak out," he said.