Monday 6 May 2007 LAWFUEL – The Law Newswire – The Australian Securities and Investments Commission (ASIC) has issued a consultation paper today seeking submissions from the public on its proposals to offer exemptions for some bodies that arrange group insurance. ASIC is seeking feedback to help it consider exemption for a number of bodies which arrange group insurance policies, such as sporting and community associations, from the licensing provisions of Chapters 7 and 5C of the Corporations Act.
Given the role of certain kinds of insurance arrangers, ASIC considers that strict compliance might be disproportionately burdensome due to the significant costs associated with holding an AFS licence and registering a managed investment scheme. When group purchasing bodies are small industry bodies or not-for-profit associations, it may not be economical for them to obtain an AFS licence or to register a managed investment scheme. Further, without relief, it is likely that insurance costs for consumers may increase and/or there may be less availability of insurance cover for consumers.
‘Obligations imposed on issuers and distributors of financial products through the licensing and registration requirements protect the interests of buyers. As the role played by group purchasing bodies is more like that of a buyer of insurance than a issuer or distributor, ASIC believes strict compliance may be disproportionately burdensome’, said ASIC Director, Policy and Research, Mr Mark Adams. ASIC is also consulting on proposals for technical relief for insurers from the product disclosure statement provisions when a person to be covered under a group insurance product would have acquired the product as a wholesale client if they were the insured.
The details of the submissions and information sought by ASIC are outlined in a consultation paper available on ASIC’s website at www.asic.gov.au or by calling ASIC’s Infoline on 1300 300 630. ASIC invites comments on the consultation paper by 25 June 2007. For further information contact: Emma Forehan ASIC Media Unit Telephone: 03 9280 3354 Mobile: 0409 702 310 Page 1 of 1