The corporate regulator has exempted authorised representatives involved in general insurance claims handling services from having to provide notification of “large numbers of employees” who have been appointed to carry out the work.
The Australian Securities and Investments Commission (ASIC) says today it decided to reduce the “administrative burden” facing the industry, following an application for relief from the Insurance Council of Australia (ICA).
ASIC consulted with various industry, consumer and government stakeholders before deciding to grant the relief.
A spokesperson for ICA says it welcomes the move by ASIC and is pleased the regulator undertook “rigorous” consultation with stakeholders “weighing up” the cost of the administrative burden to the industry against any consumer benefit before deciding to grant relief.
“The Insurance Council of Australia led the application on behalf of industry and appreciates the timely and constructive engagement by ASIC on this issue,” the spokesperson said.
The regulator made a legislative instrument, ASIC Corporations (Notification of Authorised Representatives) Instrument 2022/301, to provide the relief.
ASIC says the instrument exempts authorised representatives from the requirement to notify it of the sub-authorisation of employees who provide a claims handling and settling service on their behalf.
“The administrative burden caused by requiring authorised representatives to notify ASIC of each sub-authorisation and change in details of employees would be burdensome for industry, while producing limited consumer benefit,” ASIC said in a statement.
But ASIC says the relief does not limit the substantive obligations that authorised representatives and Australian Financial Services (AFS) licensees owe to consumers.
“Consumers with complaints about the provision of a claims handling and settling service provider, or the conduct of an authorised representative or its employees, will still have access to the internal dispute resolution processes of the AFS licensee,” ASIC said.
Authorised Representatives are persons, including companies, who are permitted to provide a financial service on behalf of an AFS licensee.
Since January 1 insurers and other entities that meet the definition of a claimant intermediary must have an AFS licence, following a recommendation from the Hayne royal commission that claims handling be regulated as a financial service.
