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Thursday, 22 May 1980
Page: 3147

Mr Jacobi asked the Treasurer, upon notice, on 21 February 1980:

(   1 ) Has his attention been drawn to recent press statements, particularly in the Adelaide Advertiser of 29 January 1980, that a number of insurance brokers in South Australia are currently the subject of investigation by the fraud squad, and that one large insurance broking company is involved.

(2)   Has his attention also been drawn to (a) press statements alleging that these companies are adopting unsatisfactory, misleading, unethical and fraudulent practices in pursuance of their business, and (b) concern expressed by officers of the Insurance Council of Australia and broker organisations who are seeking the urgent implementation of adequate supervisory and regulatory legislation to cover the activities of insurance brokers.

(3)   When does the Government expect to receive the report and recommendations on insurance brokers from the Australian Law Reform Commission.

(4)   Will appropriate legislation based on the commission's findings be considered and implemented urgently.

Mr Howard -The answer to the honourable member's question is as follows:

(1)   I am aware of press reports to the effect that complaints have been made about the practices of several insurance brokers in South Australia and that fraud squad detectives have initiated investigations into the operations of several brokers in that State.

(2)   (a) See (1) above.

(b)   The Insurance Council of Australia and a number of bodies representing insurance brokers and other insurance intermediaries have put forward various forms of proposals for the introduction of legislation for the regulation of insurance intermediaries. The Law Reform Commission has been considering the issues involved in this area and I understand that the Commission has received a number of submissions from industry bodies. As indicated in my press statement of 3 September 1 979 it would be difficult to justify the cost involved in drafting legislation in this area ahead of receiving the Commission 's advice.

(3)   I understand that a report by the Law Reform Commission on the regulation of insurance intermediaries is expected to be available to the Government within the next month or so.

(4)   The Government will make a close study of the Commission's report as soon as it becomes available.

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