ASIC Watch: $2M Penalty As Unlisted Fund Scrutiny Builds

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This story analyses Federal Court enforcement and regulatory reviews relevant to INSURANCE AUSTRALIA GROUP, QBE INSURANCE GROUP, SUNCORP GROUP, FIDANTE PARTNERS, and unlisted mortgage fund providers. 

The Federal Court has ordered Hollard Insurance to pay a $2 million penalty over delays in handling a home insurance claim, putting claims handling firmly in the regulatory spotlight. ASIC also issued stop orders against unlisted funds and reviewed mortgage broker compliance. 

• Federal Court orders Hollard Insurance to pay $2M over a three-year delay in handling a storm damage claim
• ASIC issues interim stop orders over disclosure concerns in three unlisted ASCF mortgage funds
• Interim stop order placed on Fidante’s Ares Global Credit Income Fund over Target Market Determination concerns
• Report 840 finds mortgage broker Best Interests Duty documentation needs improvement
• Full Federal Court dismisses appeal by former auditor Reginald Lance Williams 

By Valery Prihartono

The $2M Claims Delay Penalty

On 9 October 2026, the Federal Court ordered Hollard Insurance Company Pty Ltd to pay a $2 million civil penalty over its handling of a home insurance claim lodged in 2018 after severe storm damage.

The Court found Hollard failed to act with the utmost good faith required by the Insurance Contracts Act 1984 (Cth) and breached its obligation under the Corporations Act 2001 (Cth) to provide financial services efficiently, honestly and fairly.

The Court found Hollard delayed decisions and repairs for more than three years despite engineering reports recommending structural work, and did not communicate effectively with policyholders or adequately oversee third-party assessors.

It observed that the delay caused significant distress.

Investment Implications

Hollard is unlisted, and no listed insurer was party to the proceedings. The outcome is nonetheless relevant to Insurance Australia Group ((IAG)), QBE Insurance Group ((QBE)) and Suncorp Group ((SUN)).

With claims handling now covered by AFS licence obligations, delays can attract civil penalties.

Claims backlogs, outsourced assessor oversight and catastrophe response therefore remain areas to watch.

Investors may wish to track claim resolution timeframes in operational reporting.

Sideline Wrap: Mortgage Funds, Brokers and Auditors

ASCF stop orders: On 8 October, ASIC issued interim stop orders preventing Australian Secure Capital Fund Ltd from issuing interests in three unlisted retail mortgage funds.

ASIC raised concerns about Product Disclosure Statement coverage of loan-to-value ratios, borrower concentration, liquidity and redemption mechanisms, and related-party lending.

The orders remain until those concerns are addressed.

Report 840: On 13 October, ASIC reported that the mortgage broking industry has embraced the Best Interests Duty.

It found, however, that brokers often did not record why a recommended loan served the consumer’s interests, particularly where higher-cost options were chosen, and that internal dispute logging was inconsistent.

Listed broking networks may need to invest in compliance technology.

Auditor appeal: On 9 October, the Full Federal Court dismissed Reginald Lance Williams’ appeal against a disciplinary decision concerning audit quality.

Product Protection: Fidante Stop Order

On 13 October, ASIC issued an interim stop order preventing distribution of Class A units in Fidante Partners’ Ares Global Credit Income Fund.

ASIC was concerned the Target Market Determination was too broad for a product exposed to unlisted global credit markets, potentially reaching retail investors whose risk tolerance or time horizon did not match its liquidity and volatility profile.

An interim order is not a finding of breach.

Investors in complex credit products should check that the Target Market Determination suits their circumstances.

Strategic Summary

Claims handling timeframes, liquidity disclosure and distribution controls are emerging as measurable regulatory risk markers across insurance, private credit and broking.

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