Category Archive: Regulatory

New EDR scheme established for financial services complaints

The Government has passed legislation which introduces a new external dispute resolution (EDR) scheme, known as the Australian Financial Complaints Authority (AFCA), to resolve disputes relating to financial services complaints. The establishment of AFCA means there will be a single scheme for all financial services and superannuation complaints. Currently there are three separate schemes: the …

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Draft legislation proposes design and distribution obligations for financial products

Late last year, the Government released an exposure draft of the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2017 (Bill). The Bill seeks to introduce: design and distribution obligations for financial products to ensure such products are targeted at the right people; and a temporary product intervention power for ASIC …

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ASIC review into direct life insurance results in customer refunds

ASIC has announced that ClearView Life Assurance Limited (Clearview) will refund 16,000 customers a total of approximately $1.5 million. This follows an ASIC review of Clearview’s life insurance sales practices. The review focused on sales to consumers residing in high Indigenous populated areas who were unlikely to have English as their first language. The sales …

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ASIC consults on add-on insurance reforms

ASIC is seeking feedback on proposals to reform the sale of add-on insurance through car dealerships. Consultation Paper 294 sets out ASIC’s approach and proposed reforms in detail. The reforms would see the introduction of: A deferred sales model ASIC proposes to introduce a deferred sales model which would insert a pause in the sales …

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CCI sales process to be overhauled

ASIC has recently announced the establishment of a Consumer Credit Insurance (CCI) Working Group, who have been tasked with improving outcomes for CCI customers. The CCI Working Group will progress a range of reforms. A key reform will be the introduction of a deferred-sales model for CCI sold with credit cards over the phone and …

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Section 6 – farewell (and good riddance!)

In December 2016 we posted on the NSW Law Reform Commission’s recommendation to replace section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW).  Six months later, we can now confirm that section 6 is (finally) dead and herald the new era of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) …

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Breach reporting obligation repealed for group purchasing bodies

Group purchasing bodies (GPBs) are no longer required to report breaches of the conditions of relief provided by ASIC Class Order 08/1 (Class Order). The obligation to comply with the breach reporting condition in the Class Order was due to commence from 30 June 2017 but has been repealed. GPBs are persons who arrange or …

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Call for extension of conflicted remuneration ban

The ban on conflicted remuneration should extend to the general insurance industry and to all life policies, regardless of whether the policy was obtained through the superannuation system or not, according to Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST). In May this year the Government sought stakeholder submissions on the five …

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ASIC industry funding model introduced

Late last year the Government announced it would introduce an industry funding model for ASIC (our previous update on this can be found here). The ASIC Supervisory Cost Recovery Levy Bill 2017 and related bills have now passed. Effective from 1 July 2017, ASIC’s regulatory costs will be recovered through annual levies from all industry …

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ASIC sets commission caps and clawback amounts for life insurance

In February this year the Corporations Amendment (Life Insurance Remuneration Arrangements) Act 2017 (the Act) was passed by Parliament, followed by the associated regulations. Our updates on these can be found here and here. The Act removed the exemption from the ban on conflicted remuneration for commissions paid in relation to certain life insurance products. …

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