ASIC has accepted an enforceable undertaking from iExtend Holdings Company and iExi Pty after investigating concerns it was operating a financial services business without an AFS licence.
The commission says the court enforceable undertaking requires iExtend to apply for an Australian Financial Services licence “…to issue financial products, to provide general advice and to provide claims handling and settling services.”
ASIC notes iExtend was offering to pay people’s life insurance premiums in exchange for a portion of the benefit if a claim is made.
“To give effect to this arrangement, iExtend acquired interests in life insurance policies by entering into a co-ownership deed with policy holders.”
Deputy Chair Sarah Court says firms dealing in financial products have a legal obligation to be licensed and to meet important disclosure, design and distribution obligations. “ASIC has taken this action to ensure that iExtend’s customers are afforded the same protections as for the rest of the industry,” she says.
Riskinfo understands iExtend has been holding pro-active discussions over the course of many months and fully cooperating with the regulator regarding the nature of the proposition it offers eligible life insurance policy holders via their financial adviser. We also understand that, while the business will now be subject to the rules and regulations governing the conduct and operations of all AFSLs in Australia, its underlying business and value proposition will remain effectively unchanged.
Click here to view the court enforceable undertaking.
A huge endorsement of the iExtend model by the regulators. ‘Effectively saying, ‘Get a license but don’t change what you’re doing. ‘
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