The numbers from the Australian Securities and Investments Commission’s (ASIC) 2025-26 enforcement year are substantial on their own terms. For insurance professionals, the more important signal is what they indicate about where regulatory pressure is heading – and the insurance sector is now explicitly in the frame. ASIC recorded $830 million in court-ordered civil penalties and $644 million in consumer remediation payments across the 2025-26 financial year, according to figures published by the regulator on July 20, 2026. The scale of those figures becomes analytically meaningful when set against what preceded them: ASIC secured $104.1 million in court-ordered civil penalties across the entire 2024-25 financial year. The 2025-26 total is approximately eight times that figure – a shift that reflects deliberate regulatory escalation across priority sectors, insurance among them.
Insurance complaints and claims handling is among the new enforcement priorities ASIC announced for 2026, alongside private credit practices, financial reporting misconduct, and misleading pricing. That priority was established through concrete action during 2025, with ASIC commencing Federal Court proceedings against three insurers in the first half of the year. In April 2025, ASIC sued Hollard Insurance Partners Limited, alleging it breached its duty of utmost good faith by taking nearly three and a half years to resolve a storm damage home building and contents insurance claim made by a couple from regional Victoria. In September 2025, ASIC commenced proceedings against RACQ Insurance, alleging it sent more than 570,000 renewal documents containing false or misleading representations about a “last period premium” amount over more than five years, despite receiving customer complaints. ASIC also sued insurance comparison provider Choosi Pty Ltd for allegedly misleading prospective customers through its funeral and life insurance comparison services.
Alongside those proceedings, ASIC published the findings of a follow-up review of home insurer action plans in June 2025. ASIC found that insurers did not have a systemic approach to overseeing the quality of independent expert reports and generally relied on claims-handling staff, who may not have the required level of subject matter expertise, to identify errors. The review also found that many cash settlement fact sheets gave customers minimal information on their right to have a settlement reviewed. The seven insurers reviewed included AAI Limited (Suncorp), Allianz Australia, Auto & General, the Hollard Insurance Company, Insurance Australia Group, QBE Insurance, and Youi. ASIC chair Sarah Court, in a November 2025 enforcement priorities speech, made the forward direction explicit: “In the current environment, with premiums ever-increasing, claims rising, and insurance becoming increasingly out of reach, we will continue our focus on this sector. This year we will particularly look at claims and complaint handling failures.”
Two penalties from the 2025-26 record carry direct compliance implications for insurers regardless of whether their names appear in the enforcement data. The $10.3 million penalty against Mercer Super for failing to report significant breaches to ASIC applies equally to all Australian Financial Services Licence (AFSL) holders, including general and life insurers. Under the reportable situations regime for general insurance, licensees must notify ASIC in writing within 30 calendar days after a reportable situation arises, and ASIC considers failure to report a significant breach to be likely, in itself, a significant breach of the obligation to comply with financial services laws.
The $26 million penalty against Westpac for failures in responding to customer hardship requests has a direct parallel in the general insurance sector. The General Insurance Code of Practice, published by the Insurance Council of Australia (ICA), includes financial hardship provisions requiring insurers to have information on their websites about available support options and to have a policy supporting customers experiencing vulnerability. The hardship obligations Westpac was penalised for breaching in a banking context exist in comparable form for general insurer signatories under the Code.
The Federal Court ordered Cbus’s trustee, United Super Pty Ltd, to pay a $23.5 million penalty for unreasonable delays experienced by more than 7,000 members and claimants in processing death benefits and total and permanent disability insurance claims. Civil penalty proceedings against AustralianSuper, filed in March 2025 and alleging delays in processing death benefit claims, remain on foot. For life insurers providing group cover through superannuation funds, these cases represent operational and compliance exposure that extends into insurer service-level arrangements – not solely trustee governance. The total volume of death benefit claims rose 10% in the 12 months to October 2025, and ASIC expects that growth to accelerate given Australia’s demographic trajectory.
Insurance professionals operate under the Australian Prudential Regulation Authority’s (APRA) prudential framework as well as ASIC’s conduct regime, and both regulators are escalating. APRA’s 2025-26 Corporate Plan states that APRA retains a strong appetite to increase the intensity of supervision to address inadequate risk management practices and to take formal enforcement action against entities or individuals where appropriate. The Financial Accountability Regime (FAR), which extended to insurers and their licensed non-operating holding companies from March 15, 2025, introduces accountability obligations, key personnel obligations, deferred remuneration obligations, and notification obligations – adding individual-level accountability for senior executives across the sector on top of ASIC’s entity-level enforcement.
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The 2025-26 enforcement data also includes a $300 million penalty against Union Standard International Group for contracts for difference misconduct; a $35 million penalty against HSBC Bank Australia for scam protection failures, with approximately $21.5 million in consumer compensation paid to date; and a $33.5 million penalty against Walker Stores for unlawful credit practices that overcharged consumers approximately $20 million. ASIC recorded 25 criminal convictions, launched more than 250 investigations, filed 32 civil proceedings, and commenced 18 criminal prosecutions for the year. Court summarised the commission’s forward position: “Where we see serious harm or risks to market integrity, we will act quickly and use the full range of regulatory and enforcement tools available to us.” For insurers, that posture is no longer background context. It is the operating environment.
