ASIC today announced class order relief that extends the current transitional relief from dollar disclosure requirements for general insurance products.
Class Order [CO 07/123] Variation of Class Order [CO 05/683] Dollar disclosure: further transitional relief, extends current transitional relief for issuers of general insurance products from the dollar disclosure requirements in product disclosure statements (PDS) from 1 April 2007 to 30 June 2008.
In August 2006, the Parliamentary Secretary to the Treasurer, the Hon. Chris Pearce MP, announced that he proposed to introduce changes to the dollar disclosure requirements for general insurance products. In these circumstances and following consultation with industry, ASIC considers that requiring compliance with the dollar disclosure requirements at this time would impose an unreasonable burden on industry.
This extension of transitional relief from dollar disclosure requirements for general insurance products to 30 June 2008 will allow time for the implementation of the Parliamentary Secretary to the Treasurer's reform proposal.
For further background information refer to:
- Class Order [CO 05/683]: Dollar disclosure: further transitional relief
- Information Release [IR 05-35]: Transitional relief for deposit product (and related non-cash payment facility) issuers and general insurers.
- Class Order [CO 06/476]: General transitional relief for dollar disclosure
Background
Corporate and Financial Services Regulation Review
On 7 April 2006, the Parliamentary Secretary to the Treasurerreleased a consultation paper entitled, Corporate and Financial Services Regulation Review. The paper sought comments on whether specific dollar disclosure requirements should be prescribed for general insurance products.
On 14 August 2006, the Parliamentary Secretary to the Treasurer announced that the proposal for specific dollar disclosure requirements for general insurance products would be implemented through regulation.
History of transitional relief from dollar disclosure requirements
In June 2005, ASIC granted transitional relief in [CO 05/683] for issuers of deposit and general insurance products from the dollar disclosure requirements on the basis that the Australian Government was reviewing PDS requirements for basic deposit products and general insurance products as part of the Refinements to Financial Services Regulation Proposals Paper (May 2005). In December 2005, the Government excluded basic deposit products from the PDS regime, leaving non-basic deposit products, such as types of term deposits, subject to the dollar disclosure requirements.
ASIC provided further transitional relief from the dollar disclosure requirements in [CO 06/476] for issuers of both non-basic deposit products and general insurance until 31 March 2007. ASIC granted relief for non-basic deposit products to allow issuers of those products time to transition to the new dollar disclosure requirements. ASIC's extension of transitional relief for issuers of general insurance products in [CO 07/0123] does not affect the position of issuers of non-basic deposit products. The issuers of non-basic deposit products will have to comply with dollar disclosure requirements from 1 April 2007.
The relief in [CO 07/0123] means that general insurance issuers will have the benefit of the extension of relief from the dollar disclosure requirements in PDSs until 30 June 2008.