Allens Arthur Robinson: FSR site: Archive: Industries: Insurance

Insurance

FSR applies to any person who provides a 'financial service', which includes providing 'financial product advice' and dealing in a 'financial product' .

Updated as at 11 March 2004.

Most life and general insurance products are specifically designated as 'financial products' under FSR. However, reinsurance, health insurance and Commonwealth, State and Northern Territory insurance are specifically excluded from the regime.

From 11 March 2002, a person carrying on a 'financial services business' in Australia must hold an Australian financial services licence.

How does FSR affect insurance products?

Who needs to be licensed?

A business that provides a 'financial service' must be licensed. This includes businesses that:

provide financial product advice. This category includes insurers or intermediaries who make recommendations or statements of opinion that are intended to influence a prospective insured's decision in relation to a particular insurance product. It also includes recommendations or statements that could reasonably be regarded as having such an influence.
deal in a financial product. This category includes insurers and agents who issue insurance and also intermediaries who arrange for a person to acquire insurance.

Intermediaries, in particular, need to be careful in preparing their advertising material (and other information) directed at prospective clients. For example, statements in brochures to the effect of:

'We recommend that you take out [this particular] insurance.
or
[This particular] insurance is appropriate in your circumstances.'

constitute financial product advice and may only be made by financial services licensees.

There are a number of exemptions which apply to the licensing requirements. For example:

an insurer licensed by the Australian Prudential Regulation Authority (APRA) will not need an Australian financial services licence to provide a service that is regulated by APRA and which is provided only to wholesale clients;
insurance agents who provide insurance services only to their related bodies corporate are also excluded from the licence requirements; and
the handling and settlement of insurance claims (including negotiating and developing claims strategies) are not financial services under FSR.

What licence must be obtained?

FSR requires all persons who carry on a financial services business to hold an Australian financial services licence in respect of each type of business. Therefore, if a person carries on different businesses, each requiring a licence, then the person must obtain a licence to cover all of those businesses.

So an intermediary that issues insurance products on behalf of an insurer and which also provides advice to its clients about those products must hold an Australian financial services licence to cover both of those activities.

What are the requirements of the licence?

Financial services licences are issued by ASIC and may be issued subject to conditions imposed by ASIC on the licensee. The licensee must comply with any conditions attached to the licence in addition to statutory obligations, the principal requirements being those set out below.

The licensee must ensure its financial services are provided efficiently, honestly and fairly.

The licensee must ensure its representatives also comply with the legislation and are adequately trained to provide the services. (ASIC has released Policy Statement 146 'Licensing: Training of financial product advisers' in relation to the training of a financial product adviser's representatives.)
The licensee must have risk management and dispute resolution systems in place.
Licensees not regulated by APRA need to implement adequate risk management systems to comply with FSR. ASIC has released Policy Statement 164 'Licensing: Organisational capacities' to provide guidance on a licensee's systems for managing risk.
Licensees also need to have an internal dispute resolution system that meets standards prescribed by ASIC and, for retail clients, need to implement a system for compensating those clients for breaches of the Corporations Act requirements by the licensee. ASIC has released Policy Statement 165 'Licensing: Internal and external dispute resolution' in relation to internal and external dispute resolution systems.
The licensee must deal with clients' money as required by the Corporations Act, which includes establishing a separate account for moneys to be held in trust for insurance premiums paid in advance.
The licensee must comply with ASIC requirements.
A licensee must notify ASIC as soon as practicable (and in any case within five business days) of significant breaches of its licence. In most cases, a licensee must notify ASIC of the appointment of representatives within 15 business days.
The licensee must comply with the product disclosure requirements.

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What are the product disclosure requirements?

For the insurance industry, the Product Disclosure Statement (PDS) represents a significant change from pre-FSR practice. The PDS must set out the cost and benefits of the insurance, any risks associated with it, its significant characteristics such as exclusions, and any cooling-off period. ASIC has released Policy Statement 168 'Disclosure: Product disclosure statements (and other disclosure obligations)' by way of guidance for the compliance with the PDS requirements introduced by FSR.

The legislation requires the provision of a PDS when a licensee first offers or recommends insurance products to retail clients. However, there are exceptions to this rule. For example, if a risk insurance or investment life insurance product is issued or recommended to a retail client who expressly instructs that they require the financial product immediately and it is not reasonably practical to provide the client with a PDS within the time required, the licensee need only communicate the prescribed information orally (section 1012G).

Retail vs wholesale clients

FSR provides that an insurance product is deemed to be acquired by a wholesale client if it is not acquired by a person as a retail client. Where the principal product being acquired is a general insurance product, in order to be deemed a retail client:

the acquirer of the product must be either an individual or a small business (fewer than 20 employees or 100 for manufacturing businesses); and
the insurance product must be within one of the following classes of insurance prescribed by the legislation and as defined in the regulations:
- motor vehicle insurance;
- home building insurance;
- home contents insurance;
- sickness and accident insurance;
- consumer credit insurance;
- travel insurance;
- personal and domestic property insurance; or
- a kind of general insurance product prescribed in the regulations (for example, medical indemnity insurance).

Any dealing in, or provision of, a financial service that relates to a general insurance product which is not in any of the above categories does not constitute the provision of a product or service to a retail client. Note that the above categories only relate to general insurance. They do not include life insurance products.

It is important to note that the FSR disclosure obligations apply in addition to disclosure requirements arising under other insurance legislation – for example the Insurance Contracts Act 1984.

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Other FSR issues

Licensing

Class orders

Since the commencement of FSR, ASIC has released class orders by which it provides relief from, or clarifies, the operation of the FSR provisions of the Corporations Act. We discuss below some important class orders that expressly affect insurance industry stakeholders. (For further details of ASIC class orders (including amending instruments), refer to ASIC's website.)

CO 03/645, issued on 25 July 2003, ensures that an applicant, who is able to streamline an application for a product that forms part of one of the specified financial products (deposit products and insurance products respectively), is able to be authorised to provide financial services for all of the relevant specified products under the streamlined application procedure.

CO 03/824, issued on 26 October 2003, exempts persons from the need to hold a licence where they are dealing with wholesale clients and the only reason the person is carrying on a financial services business in Australia is as a result of engaging in conduct that is:
1. intended to induce people in this jurisdiction to use the financial services the person provides; or
2. is likely to have that effect
(ie, conduct deemed by section 911D to be carried on in Australia), whether or not the conduct is intended, or likely, to have that effect in other places as well.
Note that persons who are carrying on a business of providing services to wholesale clients in Australia under the more general tests used to determine whether a person carries on a business in Australia (elsewhere in the Corporations Act and under the common law) still require an Australian financial services licence (unless otherwise exempted).

Frequently asked questions (FAQs) about FSR

ASIC's answers to FAQs, which ASIC refers to as 'QFS', are published on its web site and are not definitive statements of the law or of ASIC policy but reflect ASIC's view on topical issues as at the date of posting. Some answers published in 2003 of particular interest to the insurance industry are set out below, adopting ASIC's question references.

QFS 16 Reinsurance brokers will need to consider whether they 'advise' or 'deal' in relation to 'financial products' as those terms are defined under the regime. Reinsurance is specifically excluded from the definition of financial products (section 765A(1)(g)); however, advice about reinsurance, together with advice about a financial product, may be covered. Reinsurance brokers should also consider whether they provide incidental advice about financial products (ie, insurance) or deal in, issue, vary, acquire or dispose of financial products.

QFS 36 In order to take advantage of the wholesale client licensing exemption set out in section 911A(2)(g), the financial service must be one in relation to which APRA has regulatory or supervisory responsibility. APRA's responsibility does not arise merely where the service is provided by an insurance company or a bank. Rather, the service must properly form part of an insurance business, a life insurance business or a banking business.

QFS 37 Persons who provide financial services under a Corporations Act binder given by an insurer that holds an Australian financial services licence need to be an authorised representative of the insurer or have a licence with the appropriate authorisations (section 911B(1)(b) and (d)). Licensees can be authorised representatives of other licensees if acting under a Corporations Act binder but only in relation to dealing in risk insurance products (including entering into, renewing, extending or reinstating insurance contracts and dealing with and settling claims). An insurer cannot authorise a person to give financial product advice, including general advice, about the products for which the person acts under the binder. If a person intends to provide financial product advice, they must do so outside the binder arrangement either as an authorised representative of an insurer (only if they are not licensed) or under their own Australian financial services licence or as a representative of another licensee that is authorised to provide that service.

Where a licensee insurer has a binder with a corporate entity, this does not operate to automatically make representatives or directors of that corporate entity authorised representatives of the insurer. The process in section 916B that relates to sub-authorisation must be followed.

QFS 46 Most insurance brokers will need to either become a representative of an Australian financial services licence holder or obtain a licence in their own right.

QFS 47 The FSR regime will apply to certain conduct (such as arranging and advising) in relation to financial products that include travel insurance. People who advise, arrange or deal in travel insurance will need to either obtain a licence themselves or be the representative of a licensee.

QFS 51 General insurance products are in the main caught by the FSR regime. However, certain insurance products (eg, those that provide for funeral benefits) are exempt from the definition of a financial product. Each insurer will need to consider whether the products it provides are financial products for FSR purposes and whether the insurer's activities are covered by relevant exemptions.

QFS 56 A PDS for an insurance product is not required before a superannuation fund member is covered by a group insurance policy, because the insurance product is issued to the trustee, not the member. No benefits are provided directly under the insurance product by the insurer to the member.

QFS 57 Community groups and non-profit organisations are probably retail (as opposed to wholesale) clients, as they fall within the definition of 'small business'. The product disclosure obligations that apply to financial services provided to retail clients are therefore relevant.

QFS 62 Although a person may be exempt from the requirement to hold an Australian financial services licence under Part 7.6 of the Corporations Act, they may still be required to provide a PDS to retail clients.

QFS 70 The provision of consumer credit insurance that includes a contract of general insurance is a financial product and is subject to the FSR regime.

QFS 74 Training for all general insurance products, except personal sickness and accident insurance, may be provided at Tier 2 level. As the personal accident cover provided within a travel policy is generally limited in terms of coverage, this is not considered to fall within the category of 'personal sickness and accident insurance' for the purposes of PS 146 compliance. As such, advisers in travel insurance products will generally only need to achieve Tier 2 educational standards. Note that all life product advisers must be trained to Tier 1 level.

QFS 109 An Australian financial services licensee may be the authorised representative of a second licensee who is an insurer, if the first licensee acts under a binder given by the insurer. However, a licensee acting under a binder need not necessarily be an authorised representative of the insurer. For example, the first licensee could provide the financial services that are the subject of the binder under its own licence.

QFS 110 In general, a licensee cannot be the authorised representative of a second licensee. However, section 916E specifically provides for the situation where a licensee may be the authorised representative of a second financial services licensee who is an insurer, if the first licensee acts under a binder given by the insurer.

QFS 125 Whether a person's activities constitute arranging is a question of degree. In ASIC's view, an intermediary is more likely to arrange for another person to deal in a financial product (and, therefore, provide a financial service) where there is a sufficient degree of connection between the intermediary's actions and the completion of a transaction in respect of a financial product. This may occur where the intermediary:
1. plays an important role for the consumer in relation to the particular financial product, and the transaction probably would not have proceeded without the intermediary's involvement; or
2. adds value for one or more of the parties to the transaction. Generally, the more active the intermediary is in facilitating the transaction between a consumer and a product issuer, the more likely their activity is to be arranging.
The collection and transmission of money and the receipt of benefits based on sales are also indicators that particular conduct may amount to arranging, especially when performed in conjunction with other activities (ordinarily, one of these indicators alone would not amount to arranging, however).
Dealing as an agent, including applying for, acquiring or disposing of a financial product in a second person's name where you have power to bind that second person, is not arranging.

ASIC provides the following example:
- a consumer appoints a real estate professional (the agent) to manage a rental property on the consumer's behalf; and
- as part of this arrangement, the agent has the power to bind the consumer in relation to a number of transactions, including acquiring insurance for loss of income should the rental property become vacant (usually by organising the insurance cover and paying the premium out of the rent account managed by the real estate agent).
Here, the agent has acquired a financial product (general insurance) as agent for the consumer, and the agent would need a licence with an authorisation to deal (by acquiring a financial product) on behalf of another, or be authorised to provide that service on behalf of a licensee with the relevant authorisation.

Also, where, in addition to displaying advertising material relating to the insurance product, an intermediary receives the premium for an insurance product and transmits that premium to the relevant insurance company, this conduct, when viewed as a whole, is highly likely to amount to arranging. In contrast, the mere collection of money from a consumer and transmission of that money to a product issuer is not likely to be arranging.

(Note that ASIC periodically reviews its FAQs to ensure they reflect current legislation and policy requirements. To access the most up–to–date FAQs (including revised versions), refer to ASIC's website.)
Licensing applications - key tips

For new market entrants, the following licensing tips may be useful.

In their AFS Licensing Kit, ASIC offers the following key tips for licence applicants.
- Read the AFS Licensing Kit before you start your application.
- Understand for which parts of your business you need a licence.
- Before you apply, look at the sample application and Part 2 of the AFS Licensing Kit in order to understand the questions you will be asked.
- Have your proofs ready before you submit your application (note that you only have 20 business days to lodge them).
- If you need police checks for your responsible officers, start them at least a month before you complete your application.
- Apply online – the system will guide you sequentially through the questions and tailor your application.
- When you apply online, make sure you enter your ABN, ACN or ARBN correctly.
Licensing assistance guides

In July 2003, ASIC released a licensing guide, 'Responsible officers: Demonstrating compliance with organisational competency obligations', which explains how licence applicants can demonstrate that they comply with ASIC's competency obligations in Policy Statement 164 'Licensing: Organisational capacities'. PS 164 outlines five alternative methods of demonstrating the competency of an applicant's responsible officers. The guide addresses questions raised by different industry groups about how each of these five alternatives is applied during assessment of licence applications.
In December 2003, ASIC released an updated version of its licensing guide, 'Meeting the financial requirements for your AFS licence: Compliance with Policy Statement 166'. The guide is designed to provide practical guidance about how to meet obligations under Policy Statement 166: 'Licensing: Financial requirements'. Also, ASIC continues to release periodic updates of its AFS Licensing Kit.
External dispute resolution

Section 912A of the Corporations Act sets out the general obligations of financial services licensees and section 912(1)(g) requires that if a financial services licensee intends to provide financial services to persons as retail clients then the licensee must have a dispute resolution system. Section 912A(2) not only requires the licensee to implement an internal dispute resolution procedure but also to maintain membership of an external dispute resolution scheme that has been approved by ASIC.
As at February 2004, ASIC had approved seven consumer complaints resolution schemes under Policy Statement 139 'Approval of external complaints resolution schemes'.
Insurance Enquiries and Complaints Limited (IEC) is one of those schemes. IEC is the administrative arm of the General Insurance Enquiries and Complaints Scheme (the Scheme), developed by the Insurance Council of Australia. The Scheme is a national dispute resolution scheme which is aimed at resolving disputes between insureds and their insurance companies or claimants who have a dispute with another person's insurance company in relation to motor vehicle property damage (ie, a third party claim). The Scheme also provides general information about any general insurance matter. The IEC takes care of general administration of the Scheme.
According to current information on IEC's website, there are some 76 general insurers participating in the IEC Scheme (and this number is likely to increase). The Claims Review Panel, Referee and Adjudicator operate as the determination arm of IEC. Binding determinations can be made on participating insurers by an Adjudicator for amounts not exceeding $5,000 and by a Panel or Referee for amounts not exceeding $150,000. A Panel or Referee may also make recommendations for an amount greater than $150,000 but not exceeding $290,000.
Non-compliance with licensing requirements

ASIC has shown a commitment to prosecuting providers of financial services who operate in contravention of the FSR requirements. As an example, in late 2003, ASIC obtained injunctions against an underwriter and an insurer registered in the Cayman Islands. The injunctions prohibited those entities from taking or sending any money or property belonging to them out of Australia.
The court further ordered that two directors of those entities as well as the insurance brokers be restrained from taking or sending money or property belonging to those entities out of Australia. The court found that the underwriter and the insurer were in contravention of the law for carrying on a financial services business without holding an Australian financial services licence.
The insurance broker gave undertakings to the Court that it would remove from its website all references to the underwriter and the insurer and all types of insurance products or financial services offered by them.
These types of proceedings show that ASIC may commence enforcement proceedings where it considers there is non-compliance with the requirement that providers of financial services be appropriately licensed.

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Product disclosure

Hawking guide

On 24 October 2002, ASIC released an update of 'The hawking prohibitions: an ASIC guide', which provides industry with guidance on issues that should be considered when complying with the hawking prohibitions contained in the Corporations Act, including section 992A which applies to the hawking of insurance products.
The guide was originally released in July 2002 to provide general guidance on the hawking prohibitions and, in particular, for issues such as when, in ASIC's view, a meeting or telephone call is 'unsolicited', the meaning of 'because of' and consequences of breaches of the prohibitions.
Most revisions to the guide in the October update are minor in nature. For example, the term 'offeror' is now defined by the guide to mean a person who offers financial products for issue or sale. Secondly, the examples contained in the original guide have been relegated to the form of notes and new disclaimers relating to those notes now appear in the guide. The only substantive changes to the guide are as follows.
- ASIC considers a meeting or telephone call to be unsolicited unless it takes place in response to a positive, clear and informed request from a consumer. The former guide required a positive, specific and informed request. ASIC now recognises that some requests will be fairly general and others more specific. Further, the purpose of a meeting or telephone call may change during the meeting or call. Where an offeror is in doubt, the scope of the meeting or telephone call should be confirmed with the consumer.
- In determining the purpose of the meeting or telephone call, ASIC has moved away from a subjective test (what the customer expected to discuss) to an objective test (what was reasonably within the scope of the request).
Also note that in 2003, the prohibition on making an offer to issue financial products in the course of, or because of, an unsolicited meeting or telephone call was extended to prohibit an invitation to issue or an invitation to offer financial products (section 992A(5)).
Policy illustration rates

From 11 March 2004, the life insurance policy illustration rates must be based on rates and assumptions that have been developed by the life insurer on reasonable grounds and in accordance with the FSR requirements and ASIC Policy Statement 170 'Prospective financial information'.
ASIC guidance on PDS contents

ASIC has conducted a surveillance and compliance program in relation to the FSR product disclosure regime. On 13 February 2003, ASIC announced that, as a part of that program, it had conducted preliminary reviews of 87 PDSs and full reviews of 47 PDSs relating to, amongst other things, insurance products.
ASIC noted the following general deficiencies in the PDSs that it reviewed:
- the use of undefined or unexplained terms;
- the use of terms in an unfamiliar way;
- the product issuer's ability to participate to a greater or lesser extent in the profits (at its discretion); and
- the ability of the issuer to vary fees at its discretion.
ASIC issued 13 interim stop orders relating to these deficiencies. All affected product issuers have either issued supplementary PDSs or replacement PDSs as a result of ASIC's orders.
In relation to the risk-only insurance products that it reviewed, ASIC stated that it had required corrective disclosure where some product issuers had failed to include basic premium information. This highlights the importance of ensuring that fundamental product features, such as premiums, are disclosed in PDSs in accordance with legislative requirements.

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Important FSR provisions for the insurance industry

We set out below a brief summary of some particular provisions which are specifically relevant to the insurance industry.

Corporations Act
1. s 764A To the extent that one component of a bundled product would be taken to be a financial product under FSR, then the obligations that relate to that product (for example, if that product is taken to be provided to retail clients) are applied only to that component of the product. In other words, bundled products are divisible between their retail components and wholesale components for product disclosure and other purposes.
2. s 766E(3)(ca) A person provides a financial service if, among other things, they provide a custodial or depository service. This section provides that the operation of a statutory fund by a life company is not the provision of a custodial or depository service.
3. ss 942C(2)(f), (g) and (j) These provisions are particularly relevant to authorised representatives who issue a Financial Services Guide (FSG), as they delineate the main requirements for information that should be in an FSG (for example, information on remuneration (including commission), information on associations or relationships and information on binders).
4. s 941E The inclusion in an FSG of information that is not up-to-date (or the omission of information relating to new circumstances) is deemed to constitute a misleading statement for the purposes of determining whether an FSG is defective.
5. s 942DA This section provides that an FSG and a PDS may be combined in the circumstances set out in the regulations.
6. s 981A(1) This section is relevant to licensees who have money paid to them by or for clients in relation to financial services or products, as this money then falls within the purview of this subdivision and, accordingly, must be paid into a prescribed account, cannot be the subject of a set-off or charge and is taken to be held on trust.
7. s 985B(1) This section applies to licensees who are not insurers, but who nevertheless arrange or effect contracts of insurance. Once the insured pays the licensee, they have discharged their liability to the insurer in respect of that money.
8. s 1012G If a risk insurance or investment life insurance product is issued or recommended to a retail client who expressly instructs that they require the financial product immediately and it is not reasonably practical to provide the client with a PDS within the time required, the regulated person need only communicate the prescribed information orally, rather than read a prepared statement.
9. s 1019A(1) This section sets out the classes of financial products (including insurance products) that are subject to cooling-off periods.
10. s 1019B(5) This section sets out when the right to return a financial product cannot be exercised. For example, the right to return cannot be exercised after:
- a claim has been made under a contract of insurance;
- the period of time that the insurance is taken out to cover has expired.
Corporations Regulations
1. Reg 7.1.07C Specific things that are not financial products: insurance under an overseas student health insurance contract
  This regulation provides that insurance provided by an overseas student health insurance contract is not a financial product.
2. Reg 7.1.07D Specific things that are not financial products: funeral expenses policy
  This regulation provides that a funeral expenses policy is not a financial product.
3. Reg 7.1.17A General insurance products: medical indemnity insurance products
  This regulation provides that medical indemnity insurance products are taken to be provided to retail clients.
4. Reg 7.1.31 Passing on prepared documents
  This regulation explains when a person is taken not to provide a financial service for the purposes of section 766A(2)(b) of the Corporations Act (this is particularly relevant to those disseminating insurance brochures, as that activity is generally excluded from the definition of providing a financial service).
5. Reg 7.1.33 Handling insurance claims
  This regulation explains when a person is taken not to provide a financial service for the purposes of section 766A(2)(b) of the Corporations Act (this is particularly relevant to those handling or settling insurance claims, as those activities are generally excluded from the definition of providing a financial service).
6. Reg 7.1.33D Investment-linked life insurance products
  This regulation explains that a person is taken not to provide a financial service if they are an issuer of a financial product for which they make a market and where the product is an investment-linked life insurance policy under an investment-linked contract.
7. Reg 7.6.01(1)(p) Need for Australian financial services licence: general
  The Corporations Act requires those carrying on a financial services business to have a licence. However, there are exemptions from this requirement. This regulation exempts financial services relating to insurance entered into, or proposed to be entered into, for the purposes of a law (including a State or Territory law) that relates to workers compensation where the person is licensed to provide the service under the law of the State or Territory in which the service is provided.
8. Reg 7.6.01(pa) Need for Australian financial services licence: general
  A licence is not required for financial services provided to wholesale clients by bodies established and regulated for the provision of insurance under a law of the Commonwealth or of a State or Territory that is required under a law to carry on any business of insurance or to undertake liability under a contract of insurance.
9. Reg 7.6.01(w) Need for Australian financial services licence: general
  A financial service provided to a wholesale client by the Export Finance and Insurance Corporation is exempt from the licensing requirements.
10. Regs 7.6.04(1)(g), (h) and (j) Conditions on Australian financial services licences
  These regulations list various conditions on Australian financial services licences. These are relevant to licensees, who must
  - provide a copy of an authorisation of any of their authorised representatives on request;
  - take reasonable steps to ensure that each of their authorised representatives supplies a copy of their authorisation by the licensee on request; and
  - make available a copy of their licence on request.
11. Reg 7.6.02A Obligation to notify ASIC of certain matters
  In conjunction with the amendments made to section 912D, this regulation modifies the scope and application of the breach reporting requirements to ASIC to apply to breaches of the financial services laws, which includes certain specified Commonwealth legislation (including the Insurance Act 1973 (Cth), the Insurance Contracts Act 1984 (Cth) and the Life Insurance Act 1995 (Cth)). If a licensee breaches or is likely to breach the obligation to comply with the specified laws, and the breach or likely breach is significant within the meaning of section 912D, the licensee must give a written report on the matter to ASIC as soon as practicable, and in any case within five business days, after becoming aware of the breach or likely breach.
12. Reg 7.6.04A Exemptions to notifications of authorised representatives
  The appointment of an authorised representative does not have to be notified to ASIC if the representative is only authorised to provide general advice that relates to, or deals in, general insurance products.
13. Reg 7.7.02 Situations in which FSG is not required
  An FSG is not necessary for insurance products relating to rental vehicles covering personal injury and death, property damage or both. An FSG does not need to be provided in certain circumstances for general advice given in a telephone call during which there is no issue of a product (or where the call is to an existing client); however, the providing entity must tell the client that an FSG exists and must offer to send out an FSG on request.
14. Regs 7.7.04(1)-(2) FSG given by licensee: remuneration, commission and benefits
  This regulation is particularly relevant to licensees and intermediaries who refer clients to licensees, as it provides that the FSG must disclose all remuneration (including commission) and benefits received or to be received for referrals.
15. Reg 7.7.05B Personalised FSG
  An FSG provided by an individual authorised by a corporate licensee or authorised representative does not need to include the name and contact details of the individual in certain circumstances.
16. Regs 7.7.07(1) and 7.7.07(2)(a)-(b) FSG given by authorised representative
  These regulations apply to authorised representatives of licensees, as they state that the FSG provided by the authorised representative must disclose all remuneration (including commission) and benefits received or to be received for referrals.
17. Reg 7.7.08A Combined FSG and PDS
  This regulation sets out the circumstances in which a combined FSG and PDS may be issued for a general insurance or life risk insurance product.
18. Reg 7.8.01(4) Obligation to pay money into an account
  Money paid to licensees from or on behalf of insureds (or intending insureds) in connection with a contract of insurance, or money paid to licensees from or on behalf of insurers for or on account of insureds (or intending insureds), can be paid into an account such as that described in section 981B.
19. Reg 7.8.02(6B) Accounts to be maintained for s 981B of the Act
  This regulation applies to licensees who are paid money by or on behalf of an insurer for or on account of an insured (or intending insured). Regardless of whether the money has been invested by the licensee, the insured (or intending insured) is entitled to the money as soon as the licensee receives it.
20. Reg 7.8.05 Money held in trust: risk accepted by insurer
  If a licensee holds money on behalf of an intending insured and the relevant risk has been accepted by the insurer, this regulation provides that the money is held on trust by the licensee on behalf of the insurer.
21. Reg 7.8.08 Debts of financial services licensee in relation to premiums etc
  This regulation contains provisions that stipulate how moneys received by licensees from intending insureds are to be dealt with once the relevant insurer has accepted the risk. For example, regulations 7.8.08(1)-(4) apply where the premium is known. They require the licensee to pay the premium to the insurer within 90 days of cover commencing or to notify the insurer within seven days thereafter if the licensee has not received the full premium. The regulations also contemplate circumstances in which the premium might not be known, in which case the licensee is requested to forward the amount received or an estimate of the premium likely to be payable.
22. Reg 7.8.20A Dealings involving employees of financial services licensees – risk insurance products
  Risk insurance products are exempt from the prohibition on licensees and their employees jointly acquiring financial products.
23. Reg 7.8.22 Hours for hawking certain financial products
  The prohibition on making unsolicited contact with customers as set out in anti-hawking provisions is extended to include an additional five public holidays.
24. Reg 7.8.22A Modification of Part 7.8
  The provisions relating to offers during unsolicited telephone calls are modified by removing the requirement of offering to read out the information in the PDS and instead providing the details of the provider, indicating the nature of the information in the PDS and offering to provide any of the information contained in the PDS.
25. Reg 7.9.07 Modification of Corporations Act: PDS in relation to insurance options
  The disclosure provisions set out in Part 7.9 of the Corporations Regulations are modified such that a product issuer does not have to provide a PDS if a product holder seeks to change their insurance cover under a contract associated with a superannuation product or retirement savings account.
26. Reg 7.9.07D PDS not required for offers of bundled contracts of insurance
  A PDS is not required for a general insurance product offered as part of a contract of insurance that offers more than one kind of insurance cover and which the regulated person reasonably believes that the client does not intend to acquire.
27. Reg 7.9.07E PDS not required if offer of financial product is declined
  No PDS need be given to a client who informs the regulated person explicitly that they do not wish to acquire the financial product and where no issue results from the offer (for example, where a client terminates a telephone call because of lack of interest in acquiring the product).
28. Reg 7.9.07F PDS not required if the client is not contactable
  In certain circumstances, no PDS need be given to a client who is not contactable for as long as they are not contactable.
29. Reg 7.9.14B Product information: s 1019C information about certain vehicle insurance
  This regulation is particularly relevant to those that issue insurance for the death or injury of motor vehicle drivers in certain circumstances. With certain exceptions, as soon as possible after issuing the product, the issuer must give the holder of the financial product a statement that contains some of the information required to be provided in a PDS.
30. Reg 7.9.15 More detailed information in PDS: unauthorised foreign insurer
  This regulation is particularly relevant to unauthorised foreign insurers (as defined in the regulation) who issue financial products. In this situation, the PDS must set out detailed information including a statement that the product issuer is an unauthorised foreign insurer and that the person should consider whether to obtain further information about the insurer and its local regulatory regime.
31. Reg 7.9.16 More detailed information in PDS: consumer credit insurance product
  This regulation is particularly relevant to those who issue consumer credit insurance products (as defined in the regulation). In this situation, the issuer must provide more detailed information (which is specified) in the PDS. This includes, for example, a brief explanation of the purposes of consumer credit insurance.
32. Reg 7.9.39 Benefits determined by life insurance products
  This regulation is particularly relevant to superannuation funds where the benefits paid to each member are wholly determined by reference to life insurance products. In some situations, the fund information provided to the holder of a superannuation product in this situation does not need to be as comprehensive as it otherwise would be.
33. Reg 7.9.64A Notification of exercise of right of return - risk insurance products
  This regulation is particularly relevant to retail clients with risk insurance products. The client has the right to return the product by notifying the person who sold or issued it to them in a way permitted by the person who sold or issued it to them.
34. Reg 7.9.65 Return of financial product
  This regulation applies to retail client insurance products that will expire within the usual cooling-off period (a possible example is travel insurance). For those products, the cooling-off right cannot be exercised after the start of the relevant event (such as a holiday) or the end of the usual 14 days, whichever is earlier.
35. Regs 7.9.80C/80D PDS may sometimes be provided later
  In an issue situation, in certain circumstances if the client so elects (and is not influenced by the regulated person), where a PDS is to be provided later, the regulated person need not state the essential features, significant risks and dispute resolution system relating to a financial product. In a recommendation situation, the regulated person may also be exempted from the need to state the costs, fees and charges associated with the product.