On 26 May 2015, ASIC released Consultation Paper 230, which sets out its proposals on remaking ASIC class orders on banking and insurance, namely Class Orders 04/909, 05/681 and 05/1070. These Class orders are scheduled to expire between 1 October 2015 to 1 October 2017.
ASIC intends on remaking CO 05/1070, which provides relief to AFS licensees in respect of distributors of a general insurance products. The effect of ASIC’s proposal is to maintain the current position by which such distributors are not required to be appointed as authorised representatives of the AFS licensee.
While the majority of CO 05/1070 will be remade, ASIC intends on streamlining this class order by:
- Combining it with CO 04/909, which provides similar relief to Australian Financial Service (AFS) licensees regarding distributors of basic deposit products;
- Increasing the ways through which a representative of an AFS licensee can be appointed under section 911B of the Corporations Act 2001 (Cth); and
- Removing certain notification conditions that have been duplicated.
The insurance industry is likely to welcome the extension of CO 05/1070 which means that there is no need for AFS licensees to change their current distributor models. The models have generally worked well in practice.
Submissions on the proposed changes outlined Consultation Paper 230 are due by 7 July 2015.
For a copy of Consultation Paper 230, click here.