Last Updated on June 29, 2023 by Fumipets
Cracking Down on Pet Insurance: ASIC Halts Policies from Leading Brands in Australia
In a surprising development, the Australian Securities and Investments Commission (ASIC) has imposed an interim stop order on pet insurance policies sold by several top-tier companies, including the likes of Woolworths, RSPCA, Medibank, Bupa, and others. These stop orders are impacting a considerable number of pet insurance policies in circulation, stirring up the market for these essential financial safety nets for pet owners.
Behind the Scenes: ASIC’s Concerns
ASIC, Australia’s corporate regulator, voiced concerns over these insurers’ practices, suggesting that they might not be adequately considering their customers’ financial circumstances when marketing and selling their insurance products. A total of 38 interim stop orders covering 67 policies, primarily issued through leading insurance underwriter Hollard and its subsidiary PetSure, have been served.
The interim orders have led to a temporary 21-day sales ban for the accused organizations. These companies, alleged to have ignored the financial capability of consumers to bear upfront veterinary costs before insurance claims can be reimbursed, now have three weeks to formulate their responses.
A Closer Look at Pet Insurance Practices
It’s worth noting that pet insurance has been scrutinized in the past. A study by consumer advocacy group Choice in 2019 reviewed 86 pet insurance policies and recommended none, citing their failure to provide value to consumers. The group’s policy head, Patrick Veyret, has expressed ongoing concern about the industry manipulating pet owners’ emotions to sell them insurance products that may not suit their needs or provide value.
Looking Ahead: What’s Next for the Industry?
Following ASIC’s intervention, a potential final stop order may be issued if the regulator’s concerns are not appropriately addressed. However, the accused companies are expected to present their case before any final decision is made.
Existing customers of the affected policies need not worry, as companies like PetSure, Bupa, and Medibank have assured that these orders will not impact their current policies, and policyholders can continue to file claims as usual.
While Hollard and Petbarn have expressed their commitment to addressing ASIC’s concerns, the latter declined to comment further. Meanwhile, Woolworths, HCF, RSPCA, and Guide Dogs are yet to comment.
For more information, visit ABC’s original news source.