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Government report on loan insurance to be released Friday



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6 August 1991

GOVERNMENT REPORT ON LOAN INSURANCE TO BE RELEASED FRIDAY.

The Federal Minister for Justice and Consumer Affairs, Senator Michael Tate, announced today that on Friday he will be releasing a report by the Trade Practices Commission on the Consumer Credit Insurance industry.

In announcing the impending release Senator Tate was responding to inquiries about a seperate report on the industry, "Thirty One Cents in the Dollar", which was released yesterday by the consumer group, the Australian Financial Counsellors and Credit Reform Association (AFCRRFA).

Senator Tate said "I became aware of concerns about consumer credit insurance soon after I became the consumer affairs Minister last year".

"Therefore, in September 1990, as a result of a request from the Standing Committee of Consumer Affairs Ministers' working party developing uniform consumer credit legislation, I directed the Trade Practices Commission to conduct a study of the industry".

The terms of reference for the inquiry instructed the TPC to conduct research in relation to:

(a) the extent to which methods used to promote consumer credit insurance and the mechanisms used to deliver the product affect competition in the industry

(b) the extent to which methods used to promote consumer credit insurance and the mechanisms used to deliver the product affect consumer understanding of the need for consumer credit insurance and of the terms and conditions (including the price) of the consumer credit insurance policies, and

(c) whether laws and industry practice in Australia relating to the interests of consumers in respect of consumer credit insurance are effective and provide adequate protection and redress. .

Senator Tate stated "I have now received the Trade Practices Commission's report and will be releasing it at the annual meeting of Consumer Affairs Ministers in Canberra this Friday".

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"As will be seen on Friday, the Commission's findings and recommendations have a wide ranging impact, and their implementation would require action by Commonwealth, State and Territory governments as well as changes in commercial and marketing practices by industry"

"In preparing its response to the TPC report the Government will be conducting extensive consultations with consumer groups (including the authors of "Thirty One Cents In The Dollar"), the insurance industry and State and Territory Governments."

For further information contact Adrian Wild 002/349100