Funeral Insurance - A New Life after the Hayne Royal Commission

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (2017–19) in Australia revealed widespread misconduct in the financial sector including funeral insurance. There was evidence of confusion caused by the distinction between funeral life insurance (which is regulated as a financial product by the Australian Securities and Investments Commission) and funeral expenses insurance (which was a ‘carveout’ from financial services regulation). In addition, there are prepaid funerals (called ‘funeral benefits’) which are not financial products and are regulated by the Australian Competition and Consumer Commission. From February 2020, there is potential for new life for the regulation of funeral insurance by the Australian Securities and Investments Commission following the inclusion of funeral expenses insurance as a financial product under the Corporations Act as recommended by the Royal Commission. Marketing funeral expenses insurance is now subject to the prohibitions of misleading or deceptive conduct, false representations, unconscionable conduct and unfair contract terms and the industry is now subject to standards of conduct including the obligation to do all things efficiently, honestly and fairly. More can be expected from the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission as they both regulate funeral insurance as a priority