Financial advisers who provide a claims handling and settling service on behalf of an insurer will need to have a licence for it as part of a Hayne royal commission reform proposal.

The licence requirement was contained in a draft information sheet from the Australian Securities and Investment Commission (ASIC) setting out the changes that are in store if the Bill for the proposal is passed.

ASIC says it will start accepting applications for claims handling licences from January 1 if the Bill, which also covers other royal commission proposals, secures passage before the end of this year.

The ASIC draft information says an Australian Financial Services (AFS) licence will be mandatory for anyone who is involved in claims handling and settling from January 1 2022.

The licensing requirement will apply to insurers, insurance claims managers, tradespersons who can reject claims on behalf of an insurer, brokers and claimant intermediaries who are defined as “people that run a business representing customers to pursue insurance claims for reward”.

The Financial Planning Association says it has been informed by Treasury and industry stakeholders that planners who are not employed by insurers will be exempt from the changes.

“We are actively working with Treasury and stakeholders and will continue to update our members and the broader financial planning profession on these important developments,” CEO Dante De Gori said.

Click here for the ASIC draft information sheet.