Claims Handling Exemption Regulation
AFA News 3 February 2021. On 14 December 2020, the Government released a draft regulation to provide an exemption for certain claims intermediaries from the requirement to be licensed or to have a claims handling authorisation on their AFSL. This is a matter that generated a lot of heat in December as licensees contemplated the cost of seeking a licence variation. Please click here for a copy of the draft Regulation and click here for a copy of the explanatory statement. Financial advisers were included as part of this draft regulation for an exemption, and as a result we have provided a submission to Treasury, making the following points on what needs to be addressed in the final regulation:
- The exemption needs to include all financial advisers, including those who are individually licensed, representatives and also Authorised Representatives.
- The exemption needs to cover not only the financial adviser, but also any staff members who assist the adviser in providing claims handling support and guidance.
- The exemption needs to be extended to cover clients who may not have previous received personal advice from the adviser assisting with the claim. As a specific example, we have identified corporate super advisers who do not typically provide personal advice to members of a corporate super fund, as one group who need to be included in this exemption.
- We have also proposed that where a financial adviser is approached by a new client who is seeking assistance with a life insurance claim, they should have the option to assist that consumer without the need to have a claims handling authorisation.
As we have said previously, we do not believe that financial advisers are the intended focus of this claims handling legislation and should be exempt from this new provision. We are pleased that the Government intends to provide an exemption. We just need to ensure that it is comprehensive and delivers a workable model.
Please click here to see a copy of the AFA submission.
Please contact firstname.lastname@example.org if you have any feedback.
Issued 03.02.2021. AFA Policy & Education Update