The corporate regulator has allowed relief on confirmation of transaction requirements for deceased life insurance and recurring insurance benefit payments until mid 2028. 

The relief was granted by the Australian Securities and Investments Commission (ASIC) after it consulted with the Financial Services Council, the Council of Australian Life Insurers, the Insurance Council of Australia and consumer groups. 

Since the start of last year, insurers have been required to provide Cash Settlement Fact Sheets (CSFS) and transaction confirmation notifications to joint policyholders when a claim is cash settled. The two new legislative instruments "aim to provide increased legal certainty and reduce regulatory burden”. 

“Both ... provide administrative relief in circumstances where strict compliance with the primary legislation produces an unintended or unforeseen result,” ASIC said. 

Deceased life insurance relief addresses situations where it may not be appropriate or necessary to confirm transactions where the policyholder is deceased and there is no alternative holder of the product. 

It provides legal certainty that confirmation of transactions is not required, avoiding any impediment to insurers giving confirmation of transactions to third party beneficiaries who are making claims on the deceased policyholder’s life insurance policy. 

It “reflects that under life insurance policies it is not always the policyholder who will receive the benefit of the policy,” ASIC said, and eliminates “duplicate correspondence and potential frustration or confusion for consumers”. 

Recurring insurance benefit payments relief facilitates insurers providing confirmation in the form of a statement given before, rather than after, transactions are made. This includes benefit payments where the holder of the product is unable to work because of illness, injury or unemployment. 

“The relief seeks to reduce regulatory burden. This applies where confirmation has already been given in the form of a statement that covers future payments under the recurring benefit claim for a period of no more than six months,” ASIC said. 

ASIC has previously granted relief to protect victims of family violence.