TheWallisReport-ImplicationsfortheInsuranceIndustry.docVIP

The Wallis Report - Implications for the Insurance Industry Professor Allan FelsChairmanThe Association for Women in Insurance Victorian ChapterDeloitte Touche Tohmatsu, Melbourne14 July 1997 INTRODUCTION The ACCC welcomed the Financial System Inquiry Final Report. Many of the Report’s recommendations are pro-competitive proposals which have the potential to significantly enhance competition and efficiency within the financial services sector in coming years. The ACCC regards the Inquiry’s comments on the changing nature of financial services markets as both helpful and well informed. The recommendations will help to complement and reinforce the role of the Trade Practices Act in promoting competition in the Australian economy. As an outline of my speech today I will firstly consider the general recommendations made by Wallis that are relevant to competition. I will then focus on the Inquiry’s recommendations in relation to the insurance industry and then briefly discuss the consumer protection issues arising from the Wallis Report. But before discussing any of these things, I would like to spend a minute or two discussing the Inquiry generally. OVERVIEW OF THE INQUIRY In calling the Wallis Inquiry, the Government recognised that, to use the words of the Inquiry: The stability, integrity and efficiency of the financial system are critical to the performance of the entire economy. It is an essential component of the infrastructure of commerce, providing in excess of $40 billion worth of services annually to other sectors of the economy. The Inquiry found, however, that there is scope to make our system more efficient. In international comparisons, our system comes out around the middle on most measures. That is, our system works well but is below world best practice. The Inquiry was thus concentrated on two main objectives: identifying the best overall framework for the efficient delivery of regulation; and proposing changes to the way regulation is con