The Australian Securities and Investments Commission (ASIC) has moved to provide life insurers with “conditional relief” from design and distribution obligations (DDO) in relation to re-issuing of policies.

ASIC says the move will reduce the regulatory burden for life insurers so they can reissue policies in circumstances that have a low risk for consumer harm and were offered before the DDO regime came into effect on October 5 2021.

DDO requires firms to design financial products that meet the needs of consumers, and to distribute those products in a more targeted manner. The rules stemmed from the Hayne royal commission.

ASIC says to qualify for the relief, the reissued policy must have originally been issued before October 5 2021, except where the policy is reissued to correct an administrative error or reinstate a lapsed policy and have been issued at the request of the policyholder, except where the policy is reissued to correct an administrative error.

The regulator says the policy must also be re-issued on the same terms and conditions without additional underwriting or individual loadings and must be issued to the same policyholder.

For policies issued after October 5 2021 the relief also provides for the correction of administrative errors and reinstatement of lapsed policies, ASIC said.

The instrument granting the relief will expire on March 16 2028.