Claims handling and settling: How to comply with your AFS licence obligations
This is Information Sheet 253 (INFO 253). It is for anyone who provides claims handling and settling services for insurance products regulated by ASIC.
These services were previously excluded from the definition of ‘financial service’ in the Corporations Act 2001 and persons who provided these services were not required to hold an Australian financial services (AFS) licence. This exclusion has now been removed.
This information sheet explains:
- what is a ‘claims handling and settling service’
- how the AFS licensing regime applies to these services from 1 January 2022
- when an AFS licence or variation for claims handling and settling is needed
- who can handle and settle claims on behalf of an AFS licensee
- what are the obligations of an AFS licensee and how these obligations apply to claims handling and settling, and
- when and how to apply for an AFS licence or variation, including transitional arrangements, and how we will assess applications.
It also includes some examples of how the AFS licensing regime may apply to claims handling and settling in various circumstances.
If you are applying for an AFS licence or variation, this information sheet will help you understand what you must demonstrate in your application.
Note: On 15 April 2021, the Government made regulations that exclude certain people from being ‘claimant intermediaries’: see Financial Sector Reform (Hayne Royal Commission Response) (Claimant Intermediaries) Regulations 2021. ASIC updated INFO 253 to reflect these changes to the law.
Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.
This information sheet was issued in May 2021.