Regulatory relief for business insurance with retail cover included
Regulatory relief for business insurance with retail cover included
22 August 2022
The Australian Securities and Investments Commission (ASIC) has granted regulatory relief to insurers and brokers who offer retail cover as part of bundled commercial insurance contracts.
ASIC says it created a legislative instrument, exempting them from certain retail client obligations as set out in the Corporations Act for three years.
The ASIC Corporations (Incidental Retail cover) Instrument 2022/716 clarifies obligations for bundled business insurance that includes a non-commercial component.
Bundled business insurance contracts provide several types of cover that, while predominantly wholesale, may also provide cover defined as retail under the Corporations Act.
ASIC says incidental retail cover refers to retail insurance cover provided to a business that forms a minor, incidental and inseparable part of an otherwise wholesale insurance product.
“ASIC granted relief to reduce regulatory burden and provide certainty for industry that the retail client obligations do not apply to what are, in reality, business insurance products,” the corporate regulator says.
“This prevents compliance costs arising from the retail client obligations from being incurred and passed on to businesses.”
The regulator received an application from an insurer seeking retail client obligations relief and consulted with various industry, consumer and government stakeholders before deciding to grant the exemption.
