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Intermediaries still concerned with ASIC payment regime

Australian Securities and Investments Commission (ASIC) cost-recovery plans continue to cause uncertainty for insurance intermediaries, which fear paying excessive amounts due to definition problems.

ASIC says the cost-recovery framework has been finalised and the first invoices for this financial year will be sent to regulated entities in January.

But underwriting agencies and brokers are still seeking clarification on wording used for the new arrangements.

“The way it can be interpreted is that we could be issuers, and the problem with that is we would be paying the same money as insurance companies, which is not viable,” Underwriting Agencies Council (UAC) GM William Legge told insuranceNEWS.com.au.

“We do need to be very clear in our minds about what is the intention, and is that a valid intention.”

In its latest release on the matter, ASIC says: “The definition of insurance product issuers has been expanded to include Australian financial services licensees that make offers to arrange for the issue of insurance products under an intermediary authorisation with an Australian Prudential Regulation Authority-regulated insurer that does not hold a licence.”

National Insurance Brokers Association CEO Dallas Booth says the organisation is seeking advice on the regulations’ final form. “We will then prepare a detailed statement of guidance for our members on the impact and operation of the ASIC cost-recovery regime,” he said.

ASIC Chairman Greg Medcraft says industries the regulator oversees will receive further details later this year in a cost-recovery implementation statement.

“ASIC will continue to support industry to comply with their obligations as they become due,” he said.

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