media release (20-179MR)

ASIC consults on proposed product intervention order for the sale of add-on motor vehicle financial risk products


ASIC is seeking stakeholder feedback on a proposed product intervention order on the sale of add-on insurance and warranty products sold with motor vehicles.

ASIC is considering using its product intervention powers to address significant consumer detriment in this market.

Today’s release follows ASIC’s earlier consultation through Consultation Paper 324 Product intervention: The sale of add-on financial products through caryard intermediaries (CP 324), published in October 2019. The initial consultation sought views on ASIC’s proposal to use the product intervention power in Pt 7.9A of the Corporations Act 2001 to introduce a deferred sales model for the sale of add-on insurance and warranties by caryards.

ASIC also undertook additional work to consider the impact of the COVID-19 environment on the market in recent months.

The consultation process

Before making a product intervention order, ASIC must consult persons who are reasonably likely to be affected by the order: see s1023F of the Corporations Act.

In response to the submissions received to CP 324, ASIC has made a number of changes to the proposed product intervention order.

These changes are set out in detail in the attached documents and include a number of specific questions to assist consideration.

ASIC invites stakeholder feedback on these changes. The feedback will help ASIC consider whether, and if so how, to exercise the product intervention power.

Stakeholders who have difficulty meeting the timeframe for feedback please contact ASIC via the email below.

Comments should be sent by Wednesday 19 August 2020 to:



In February 2016, ASIC released Report 471 The sale of life insurance through car dealers: Taking consumers for a ride (REP 471). Following this, ASIC released Report 492 A market that is failing consumers: The sale of add-on insurance through car dealers (REP 492) in September 2016. These reports set out a detailed analysis of how this market is failing consumers in the design, pricing and sales of add-on insurance.

Insurers have acknowledged the extent to which unfair sales occurred by agreeing to pay refunds to consumers, improving product coverage and reducing commissions paid to caryard intermediaries. ASIC has secured remediation with 11 insurers, one underwriting agency and one warranty provider. As at June 2019, ASIC has announced refunds of over $130 million to more than 245,000 consumers.

In August 2017, ASIC released Consultation Paper 294 The sale of add-on insurance and warranties through caryard intermediaries, which sought views on whether or not a deferred sales model should be introduced for the sale of add-on financial products through caryard intermediaries. ASIC is considering using the product intervention power to help address ongoing significant consumer detriment in this market.

The proposed product intervention order would complement the proposed industry-wide deferred sales model for add-on insurance to be implemented as part of the Government’s response to the Financial Services Royal Commission (recommendation 4.3). The deferred sales model and additional obligations set out in the draft order are tailored to the unique risks consumers experience when offered add-on products in relation to the sale of motor vehicles.

Editor’s note:

18 March 2021: After careful consideration, ASIC has decided not to proceed with an order for either motor vehicle add-on insurance or warranties at this time.  

Under the Financial Services Reforms (Hayne Royal Commission Response) Act 2020 an industry-wide deferred sales model will apply to the sale of motor vehicle add-on insurance from 5 October 2021.

ASIC strongly encourages warranty providers to voluntarily adopt a deferred sales model for their products, aligned in design to the forthcoming add-on insurance deferred sales model.

ASIC will continue to closely monitor the motor vehicle warranty and add-on insurance markets. We will collect data and information from industry to assess consumer outcomes from the design and sale of these products. If we identify consumer harm, we will take action to address this using our range of regulatory tools including reconsidering the need for a mandated DSM. 

Media enquiries: Contact ASIC Media Unit