Submission – Enhancing the effectiveness of financial service professional indemnity insurance

Strengthening professional indemnity insurance (PII) requirements can play a role in improving consumer outcomes, particularly for adviser‑level misconduct where PII is capable of responding. Mandating relevant financial firms, especially in higher‑risk segments of personal advice, to maintain adequate, reliable PII helps ensure that a portion of straightforward misconduct claims are addressed before they escalate to the CSLR. While this will not materially reduce claims arising from large‑scale licensee failures or insolvency, where PII typically does not respond, targeted improvements to PII settings can still reduce some routine claims pressure, reinforce basic accountability, and modestly limit the number of smaller disputes reaching the scheme. These measures should therefore be viewed as complementary to, rather than substitutes for, the broader regulatory and supervisory reforms needed to preserve the CSLR as a genuine last‑resort mechanism and to shield compliant levy payers from the costs of systemic failures