Accounting, ASIC

ASIC provides insurance product relief

The Australian Securities and Investments Commission (ASIC) has remade Class Order Group Purchasing Bodies to extend relief to holders of limited Australian financial services licences (AFSL) so they are exempt from needing to hold a full AFSL in order to purchase group insurance products for their clients.

The new instrument, ASIC Corporations (Group Purchasing Bodies) Instrument 2018/751, is intended to provide relief for accountants who faced unintended consequences when it was deemed they required a full AFSL to purchase group insurance products for their clients.

Accountants needed to obtain limited licenses to continue to provide SMSF advice services after the accountants’ exemption was scrapped in 2016.

The availability of exemptions in Class Order 08/1 is affected by whether the group purchasing body holds a full AFSL.

“The new instrument reinstates the class relief that was previously available to accountants for purchasing group insurance products,” ASIC said.

The new instrument will provide class relief to eligible group purchasing bodies from requirements in the Corporations Act 2001, including registration of a managed investment scheme under chapter 5C, Australian financial services licensing for certain activities (dealing, providing custodial or depository services and providing certain financial product advice) relating to risk management products, and certain other requirements in chapter 7 relating to disclosure and other conduct.

A group purchasing body arranges or holds cover under risk management products for other people, but does not issue risk management products or provide any financial product advice other than general information about the product.

ASIC is extending the period of the relief given under Class Order 08/1 to carry out a more detailed review of the policy settings. It will engage with other interested stakeholders through public consultations in 2019.

“Following this review, ASIC will look to repeal Instrument 2018/751 and replace it with a framework that includes any changes that have been identified as appropriate,” it said.

ASIC expects a final outcome by the end of 2020.

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