ASIC has granted relief to life and general insurers to provide modifications and exemptions from the confirmation of transaction requirements contained in section 1017F of the Corporations Act in prescribed circumstances.
The relief is set out in two separate legislative instruments that aim to provide increased legal certainty and reduce regulatory burden in relation to life and general insurance policies.
Both relief instruments form part of ASIC’s commitment to provide administrative relief in circumstances where strict compliance with the primary legislation produces an unintended or unforeseen result.
The relief will expire on 1 July 2028. ASIC will review the operation and appropriateness of the instruments before they expire.
Confirming transactions – deceased life insurance policyholder
This relief seeks to address situations where it may not be appropriate and/or necessary to confirm transactions with the holder of a life insurance policy where the life insurance policyholder is deceased and there is no alternative holder of the product.
The relief seeks to provide legal certainty that confirmation of transactions is not required to be given to a life insurance policyholder if the initial owner of the policy has deceased.
This aims to avoid any perceived impediment to insurers giving confirmation of transactions to third party beneficiaries who are making claims on the deceased policyholder’s life insurance policy.
The relief also seeks to reduce regulatory burden, and:
- reflects that under life insurance policies it is not always the policyholder who will receive the benefit of the policy,
- further ensures that confirmation of transactions is provided to the individual/s who will actually receive the benefit of the policy, and
- encourages the elimination of duplicate correspondence and potential frustration or confusion for consumers.
- ASIC Corporations (Confirming Transactions—Deceased Life Insurance Policyholder) Instrument 2023/437
- Explanatory Statement
Confirming transactions – recurring insurance benefit payments
For certain recurring benefit claims, this relief seeks to facilitate life and general insurers providing confirmation in the form of a statement given before, rather than after, the transactions are made.
This includes benefit payments where the holder of the product is unable to work because of illness, injury or unemployment.
The relief seeks to reduce regulatory burden by providing an exemption from giving confirmation of the transaction after a recurring benefit claim payment has occurred. This applies where:
- confirmation has already been given in the form of a statement that covers future payments under the recurring benefit claim for a period of no more than six months, and
- the statement complies with subsections 1017F(6)-(8) of the Corporations Act 2001 in relation to the payment and each other payment covered by the statement.
- ASIC Corporations (Confirming Transactions—Recurring Insurance Benefit Payments) 2023/438
- Explanatory Statement
Since 1 January 2022, insurers are required to confirm transactions to the holder of an insurance product, including payment or settlement of an insurance claim, after the transaction occurs. This includes information allowing the holder to understand the nature of the transaction, such as the date and description of the transaction.
The relief was granted following an application for relief from the Financial Services Council (FSC). ASIC consulted with the FSC, the Council of Australian Life Insurers, the Insurance Council of Australia, and a range of consumer representative bodies before deciding to grant the relief.
ASIC has previously granted relief to exempt insurers from providing certain notifications, including confirmation of transactions, where doing so could place victims of family violence at risk of harm (see 22-261MR).