What is the Financial Accountability Regime (FAR) and how does it affect my life insurance?

The Financial Accountability Regime (FAR) is a new regulatory framework commencing 15 March 2025 for Australia's insurance and superannuation industries, jointly overseen by APRA and ASIC. FAR strengthens responsibility and accountability frameworks to improve risk governance cultures at insurance companies. For consumers, FAR means enhanced protections including clearer accountability (senior executives and directors are personally accountable for their areas of responsibility, making it easier to identify who's responsible when things go wrong), improved conduct and culture (insurers must maintain better risk management practices and fair customer treatment), enhanced transparency (better disclosure requirements help you understand products and compare insurers), stronger complaints handling (accountability requirements mean complaints and disputes should be resolved more fairly and efficiently), and better claims practices (executives are accountable for claims handling, potentially leading to faster, fairer claim processing). While FAR doesn't directly change your policy terms or coverage, it creates a stronger regulatory environment where insurers face greater consequences for poor practices, potentially leading to fewer claim disputes, better customer service, more transparent pricing and premium increases, and improved product design focused on customer outcomes. ASIC and APRA have been publishing regular life insurance claims and disputes statistics to increase industry transparency, and FAR builds on these accountability measures. When comparing Australian life insurance providers, consider their track record on claims acceptance rates, dispute resolution performance, and customer complaints – all areas where FAR accountability should drive improvement. The regime aims to restore consumer trust in Australia's life insurance industry following various scandals and the Banking Royal Commission findings.