The regulation of insurance intermediaries in the Australian financial services market

The insurance industry discharges a critical role in the Australian economy and is a significant part of the Australian financial services market. The industry relies upon intermediaries, the principal types being brokers and agents, to promote, arrange and distribute their products and services in the market. The pivotal role that they play in this context and sensitivities associated with the consumer oriented products, such as house and contents insurance, has ensured close regulatory attention. Of particular importance was the passage of the Insurance (Agents and Brokers) Act 1984 (Cth), a comprehensive attempt to address the responsibilities of intermediaries as well as particular problem areas associated with the handling of money. However, with the introduction of financial services and market reform early in the new millennium this insurance intermediary specific regulatory approach was abandoned in favour of a market-wide strategy; that is, market reform was based upon across-the-board licensing, disclosure, conduct and fairness standards, and all financial products and services are now regulated at a generic level under Ch 7 of the Corporations Act 2001 (Cth). This article briefly explores the categories of insurance intermediaries and the relevant distinctions between them but focuses mainly upon the regulatory context in which they operate. This context transcends a strictly legal framework as the regulatory body, the Australian Securities and Investments Commission (ASIC), has sought to inform and guide the market through Policy Statements and Regulatory Guides. The usefulness of these guides as an adjunct to the legislation in explaining the scope and operation of regulatory framework is examined. In addition, the article looks at the self-regulatory and dispute resolution practices in this area and their impact. In conclusion an assessment of this across-the-board regulatory regime is advanced.

Vulnerability, insurance and policy: The learner driver's standard of care

In Cook v Cook the Australian High Court held that the standard of reasonable care owed by a learner driver to an instructor, conscious of the driver’s lack of experience, was lower than that owed to other passengers and road users. Recently, in Imbree v McNeilly, the High Court declined to follow this principle, concluding that the driver’s status or relationship with the claimant should no longer influence or alter the standard of care owed. The decision therefore provides an opportunity to re-examine the rationale and policy behind current jurisprudence governing the standard of care owed by learner drivers. In doing so, this article considers the principles relevant to determining the standard and Imbree’s implications for other areas of tort law and claimant v defendant relationships. It argues that Imbree was influenced by changing judicial perceptions concerning the vulnerability of driving instructors and the relevance of insurance to tortious liability.

Enhancing business continuity management capacities in the insurance industry : a Southeast Asian perspective

As a resilience enhancing practice, business continuity management (BCM) can play an important role in aiding preparation of the insurance industry for coping with the losses incurred by major discontinuity incidents: regardless of cause. Acknowledging the increasing frequency of unpredictable man-made disasters and natural catastrophes, the insurance industry would benefit from examining and implementing, where suitable, key elements of BCM. Such strategic decisions would assist insurers and re-insurers collectively to enhance mutual capability to respond to, and recover from, the impact of significant losses. This paper presents a comparison of opinions about BCM practitioners in both retail and re-insurance companies on the importance of generic continuity practices with actual levels of BCM practice across the two industry groups in Southeast Asia. It suggests means by which multi-lateral cooperation across Asian economies and between retail and re-insurance market segments might enhance the viability of the insurance industry in the face of increased stress from major natural and socio-technical hazards.

Floods, earthquakes and insurance coverage : issues, problems and solutions

The recent floods in Queensland and elsewhere in Australia as well as the recent earthquakes in New Zealand have again given rise to very significant uninsured losses. This article looks at the issue of cover protection against catastrophes such as floods and earthquakes affecting home buildings and contents insurance and the standard cover provisions of the Insurance Contracts Act 1984 (Cth). It points also to the possibility of a national scheme to cover natural disasters including floods.

Insurance and the law of negligence : an influential or irrelevant persuader?

This article examines, from both within and outside the context of compulsory third party motor vehicle insurance, the different academic and judicial perspectives regarding the relevance of insurance to the imposition of negligence liability via the formulation of legal principle. In particular, the utility of insurance in setting the standard of care held owing by a learner driver to an instructor in Imbree v McNeilly is analysed and the implications of this High Court decision, in light of current jurisprudential argument and for other principles of negligence liability, namely claimant vulnerability, are considered. It concludes that ultimately one’s stance as to the relevance, or otherwise, of insurance to the development of the common law of negligence will be predominately influenced by normative views of torts’ function as an instrument of corrective or distributive justice.

Investigation of the effect of organics on the water uptake of marine aerosols

Water uptake refers to the ability of atmospheric particles to take up water vapour from the surrounding atmosphere. This is an important property that affects particle size and phase and therefore influences many characteristics of aerosols relevant to air quality and climate. However, the water uptake properties of many important atmospheric aerosol systems, including those related to the oceans, are still not fully understood. Therefore, the primary aim of this PhD research program was to investigate the water uptake properties of marine aerosols. In particular, the effect of organics on marine aerosol water uptake was investigated. Field campaigns were conducted at remote coastal sites on the east coast of Australia (Agnes Water; March-April 2007) and west coast of Ireland (Mace Head; June 2007), and laboratory measurements were performed on bubble-generated sea spray aerosols. A combined Volatility-Hygroscopicity-Tandem Differential Mobility Analyser (VH-TDMA) was employed in all experiments. This system probes the changes in the hygroscopic properties of nanoparticles as volatile organic components are progressively evaporated. It also allows particle composition to be inferred from combined volatility-hygroscopicity measurements. Frequent new particle formation and growth events were observed during the Agnes Water campaign. The VH-TDMA was used to investigate freshly nucleated particles (17-22.5 nm) and it was found that the condensation of sulphate and/or organic vapours was responsible for driving particle growth during the events. Aitken mode particles (~40 nm) were also measured with the VH-TDMA. In 3 out of 18 VH-TDMA scans evaporation of a volatile, organic component caused a very large increase in hygroscopicity that could only be explained by an increase in the absolute water uptake of the particle residuals, and not merely an increase in their relative hygroscopicity. This indicated the presence of organic components that were suppressing the hygroscopic growth of mixed particles on the timescale of humidification in the VH-TDMA (6.5 secs). It was suggested that the suppression of water uptake was caused by either a reduced rate of hygroscopic growth due to the presence of organic films, or organic-inorganic interactions in solution droplets that had a negative effect on hygroscopicity. Mixed organic-inorganic particles were rarely observed by the VH-TDMA during the summer campaign conducted at Mace Head. The majority of particles below 100 nm in clean, marine air appeared to be sulphates neutralised to varying degrees by ammonia. On one unique day, 26 June 2007, particularly large concentrations of sulphate aerosol were observed and identified as volcanic emissions from Iceland. The degree of neutralisation of the sulphate aerosol by ammonia was calculated by the VH-TDMA and found to compare well with the same quantity measured by an aerosol mass spectrometer. This was an important verification of the VH-TMDA‘s ability to identify ammoniated sulphate aerosols based on the simultaneous measurement of aerosol volatility and hygroscopicity. A series of measurements were also conducted on sea spray aerosols generated from Moreton Bay seawater samples in a laboratory-based bubble chamber. Accumulation mode sea spray particles (38-173 nm) were found to contain only a minor organic fraction (< 10%) that had little effect on particle hygroscopicity. These results are important because previous studies have observed that accumulation mode sea spray particles are predominantly organic (~80% organic mass fraction). The work presented here suggests that this is not always the case, and that there may be currently unknown factors that are controlling the transfer of organics to the aerosol phase during the bubble bursting process. Taken together, the results of this research program have significantly improved our understanding of organic-containing marine aerosols and the way they interact with water vapour in the atmosphere.

Autonomous aerial navigation and tracking of marine animals

In this paper, we describe the development of an independent and on-board visual servoing system which allows a computationally impoverished aerial vehicle to autonomously identify and track a moving surface target. Our image segmentation and target identification algorithms were developed with the specific task of monitoring whales at sea but could be adapted for other targets. Observing whales is important for many marine biology tasks and is currently performed manually from the shore or from boats. We also present hardware experiments which demonstrate the capabilities of our algorithms for object identification and tracking that enable a flying vehicle to track a moving target.

Incentivising private health insurance through the income tax regime : Capitalising on behavioural models

The Australian income tax regime is generally regarded as a mechanism by which the Federal Government raises revenue, with much of the revenue raised used to support public spending programs. A prime example of this type of spending program is health care. However, a government may also decide that the private sector should provide a greater share of the nation's health care. To achieve such a policy it can bring about change through positive regulation, or it can use the taxation regime, via tax expenditures, not to raise revenue but to steer or influence individuals in its desired direction. When used for this purpose, tax expenditures steer taxpayers towards or away from certain behaviour by either imposing costs on, or providing benefits to them. Within the context of the health sector, the Australian Federal Government deploys social steering via the tax system, with the Medicare Levy Surcharge and the 30 percent Private Health Insurance Rebate intended to steer taxpayer behaviour towards the Government’s policy goal of increasing the amount of health provision through the private sector. These steering mechanisms are complemented by the ‘Lifetime Health Cover Initiative’. This article, through the lens of behavioural economics, considers the ways in which these assorted mechanisms might have been expected to operate and whether they encourage individuals to purchase private health insurance.

A comparative study of the number and mass of fine particles emitted with diesel fuel and marine gas oil (MGO)

The current investigation reports on diesel particulate matter emissions, with special interest in fine particles from the combustion of two base fuels. The base fuels selected were diesel fuel and marine gas oil (MGO). The experiments were conducted with a four-stroke, six-cylinder, direct injection diesel engine. The results showed that the fine particle number emissions measured by both SMPS and ELPI were higher with MGO compared to diesel fuel. It was observed that the fine particle number emissions with the two base fuels were quantitatively different but qualitatively similar. The gravimetric (mass basis) measurement also showed higher total particulate matter (TPM) emissions with the MGO. The smoke emissions, which were part of TPM, were also higher for the MGO. No significant changes in the mass flow rate of fuel and the brake-specific fuel consumption (BSFC) were observed between the two base fuels.