{"id":53493,"date":"2020-12-07T10:44:34","date_gmt":"2020-12-07T00:44:34","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=53493"},"modified":"2020-12-11T13:47:17","modified_gmt":"2020-12-11T03:47:17","slug":"afa-advice-on-removal-of-the-claims-handling-exemption-as-a-financial-service","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2020\/12\/07\/afa-advice-on-removal-of-the-claims-handling-exemption-as-a-financial-service\/","title":{"rendered":"AFA Advice on Removal of Claims Handling Exemption"},"content":{"rendered":"

The AFA<\/a> does not believe that advice licensees will need to vary their licences under recent Royal Commission legislation on claims handling, and recommends its members do nothing for now.<\/p>\n

In an alert to its members the association says financial advisers have unfortunately been caught up in the confusion around whether the recent Royal Commission legislation on claims handling would result in advice licensees needing to vary their licences: “We do not believe this will be the case,” it says.<\/p>\n

\u201cIt is our understanding that financial advisers will be exempt from these new obligations and we recommend that members do nothing at this stage.”<\/p>\n

the association\u00a0 …has asked the Government to confirm an exemption for financial advisers…<\/p><\/blockquote>\n

The association says it has contacted ASIC, the Minister’s Office and the Treasurer’s Office and has asked the Government to confirm an exemption for financial advisers as soon as possible in order to provide certainty, thus removing any concerns. (Also see: AFS Licence for Claims Handling<\/a>).<\/p>\n

As background the AFA explains that recommendation 4.8 of the Hayne Royal Commission, to remove the claims handling exemption, \u201c\u2026was primarily aimed at insurers, to ensure claims handling and settling was executed ‘efficiently, honestly and fairly’ and that ASIC has the power to regulate accordingly\u201d.<\/p>\n

It says that at present the handling and settlement of insurance claims is excluded from the definition of \u2018financial service\u2019 by a regulation, and as a result, some of the general obligations set out in section 912A of the Corporations Act\u00a0 does not apply to the handling of insurance claims.<\/p>\n

On 12 November 2020, the Treasurer introduced the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020 into the House of Representatives, which included legislation that will require a licence for claims handling.<\/p>\n

\u201cThe legislation was clear that financial advisers working on behalf of life insurers would need to obtain a variation to their licence to continue to provide this service. It also made reference to people playing the role of claims intermediaries needing to be licenced.”<\/p>\n

AFA says that\u00a0 ASIC\u2019s draft information sheet on claims handling, referring to the legislation and setting out expectations with respect to applying for a licence or varying a licence \u201d…did not state that financial advisers, who assist their clients with life insurance claims, would need to seek a variation in their licence, however, neither did it provide any clarity on the matter\u201d.<\/p>\n

It notes that ASIC was unable to provide this certainty, as it is an issue for the Government to resolve.<\/p>\n

…it was not in any way focused upon financial advisers who advocate for their clients in the claims process…<\/p><\/blockquote>\n

The association’s alert says Royal Commission recommendation 4.8 was \u201c\u2026absolutely focused on insurers (both life and general) and those working on their behalf. It was not in any way focused upon financial advisers who advocate for their clients in the claims process\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"

The AFA does not believe that advice licensees will need to vary their licences under recent Royal Commission legislation on claims handling, and recommends its members do nothing for now. In an alert to its members the association says financial advisers have unfortunately been caught up in the confusion around whether the recent Royal Commission […]<\/p>\n","protected":false},"author":24,"featured_media":53500,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8],"tags":[],"class_list":["post-53493","post","type-post","status-publish","format-standard","has-post-thumbnail","category-associations","category-compliance-regulation"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/53493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=53493"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/53493\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/53500"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=53493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=53493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=53493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}