A Treasury consultation will consider exemptions to the new deferred sales model for add-on insurance.

Late last year Parliament passed the Financial Sector Reform Bill, which includes establishing an industry-wide deferred sales model to address concerns flagged during the Hayne royal commission.

Royal commission hearings in 2018 were told of high commissions and incentives paid to motor dealerships to sell cover, which was alleged to be worthless in many cases.

The deferred sales model will introduce a pause between the primary product purchase and add-on insurance purchase to give consumers more time to make considered decisions.

But Treasury says “there may be a limited number of add-on insurance product classes that represent a very high level of value for consumers and where it would not be appropriate that they are captured by the deferred sales model”.

It is seeking stakeholder submissions to identify any such product classes, with a deadline of February 15.

The deferred sales model will be effective from October 5 and any add-on insurance products without an exemption in place at that time will be subject to the new model.

Click here for more information.