Insurers have designed "complex and extremely poor value products, and put their reputations at risk," ASIC chief Greg Medcraft declared in a caustic speech on Friday. The sector has, in effect, preyed on "some of the most vulnerable consumers in society" and they "are paying the price," he said.Speaking at the Insurance Council of Australia Annual Forum in Sydney on Friday, Medcraft summarised the recent work of the Australian Securities and Investments Commission on the insurance industry, finding little to say that was complimentary.Riffing off ASIC's 2016 review of general insurance add-ons sold through car dealers, Medcraft summarised that the "findings are, to put it bluntly, shocking."He reminded an audience of sector leaders that the regulator's review found "an overall claims ratio of nine per cent across the five products reviewed," while car dealers received "four times more in commission payments than consumers received in claims, with commissions paid as high as 79 per cent."There was, in that sector silo, "sales environment that inhibits good decision making about the product because of conflicts of interest and pressure sales," he said."We will use our full regulatory toolkit - including using our modification powers in the Corporations Act - to respond to poor consumer outcomes in this sub-sector," Medcraft warned. He reminder insurers that, in December, the Government began consultation on the introduction of a new product design and distribution framework for financial products, and "a product intervention power which will enable ASIC to take direct action to deal with significant shortcomings in products or conduct that result in consumer detriment."It looks like ASIC expects to be busy putting any new powers to work."You might expect that this [review] should not mean significant change for industry," he said."These look to be sound principles that one would expect a well-run business, looking to treat their customers well, would follow. "And yet, our work on add-on insurance highlights the need for these obligations. Our findings put beyond any doubt that many of the disciplines that the new obligations will introduce are still needed - not just in one firm, but across the market."Ending on a familiar theme - culture - Medcraft said: "I can't help but come back to the add-on insurance products that we've highlighted in our reports. "A culture that focuses on commissions and conflicted remuneration for intermediaries over and above providing consumers with a product that meets their needs is not sustainable. "A culture where it is acceptable to simply pass a product on to a third party, with no consideration for who the final consumer might be and whether the product offers them any value at all, will inevitably lead to poor consumer outcomes."