Other legislative measures include cracking down on superannuation trustees, including preventing them on having duties other than those arising from their role as trustees, and bolstering the power and accountability of financial regulators.
Customer power will be enhanced by allowing the Australian Securities and Investments Commission to “designate” a provision in an industry code of conduct, meaning breaching it will attract civil penalties.
Stakeholders have only one month to respond to a large volume of draft legislation, a quick timetable likely to concern financial institutions.
Australian Banking Association chief executive Anna Bligh said: “We have anticipated the release of this tranche of bills and are ready to provide feedback to the government to ensure they fix the problems identified by the royal commission.”
Mr Frydenberg said the government is taking action on the commission’s 76 recommendations, 54 of which were directed at the government and 40 which required legislation.
“We are on track to meet the accelerated timetable outlined in our implementation roadmap,” he said in a statement.
“Through our actions today and over the past 12 months since the final report was released, the government has implemented 16 commitments, has legislation before parliament to implement another eight and has substantially progressed a further 35 which have been, or are currently being, consulted on ahead of their introduction.”
It comes as Labor criticised the government for legislating only six of royal commissioner Kenneth Hayne’s recommendations.
“This is a marketing reaction to being caught out,” Labor financial services spokesman Stephen Jones said.
“They are still more concerned about the PR than getting the recommendations legislated.”
“Their inaction means that families who suffer [insurance] claims handling issues from bushfires, hailstorms and floods this summer are left without protection. They missed their own deadline to introduce this legislation by the end of 2019.”
Reforms the government has already fully implemented include ending grandfathered commissions for financial advisers, prohibiting superannuation funds from treating employers, tougher civil penalties for company directors and trustees and giving ASIC product intervention powers.
Several of the measures unveiled by Mr Frydenberg on Friday related to insurance.
These included an industry-wide deferred sales model for the sale of add-on insurance products, providing the corporate regulator with the power to impose a cap on commissions for add-on insurance products, and conditions on life insurers to crack down on misrepresentations and non-disclosures.