The Australian Securities and Investments Commission (ASIC) has released the draft information sheet for insurance claims handling and settling following the introduction of the Financial Sector Reform Bill 2020 into Parliament earlier this month.
As part of the new bill, individuals providing claims handling and settling services must be covered by an Australian Financial Services (AFS) license. The general conduct obligations under section 912A of the Corporations Act 2001 (Cth) will also apply.
ASIC's draft information sheet aims to help the industry to comply with the timeframes in the bill. It details who needs to be authorised to provide claims handling and settling services for insurance products and who can act on an AFS licensee's behalf. It also explains how and when to apply for an AFS licence.
The information sheet also refers to existing regulatory guidance on how to meet the general obligations under section 912A of the Corporations Act 2001 and indicates how the obligations may be tailored to claims handling.
Individuals who need to get an AFS license or must be authorised by another AFS license include insurers, insurance claims managers, tradespersons who can reject claims on behalf of an insurer, insurance brokers or financial advisers who handle claims on behalf of an insurer, and people who can carry on a business of representing those to pursue insurance claims for reward.
Meanwhile, entities that already hold an AFS licence must apply for a variation to their licence so that it covers the new financial service of claims handling and settling.
ASIC will issue the final information sheet and proof document ahead of the commencement of the reforms. It will start taking applications for AFS licenses and variations to existing licenses on January 01, 2021.