Brokers believe that a regulatory class order offering relief for group purchasing bodies is unnecessarily confusing and expensive.

Discussions between the National Insurance Brokers Association (NIBA) and the Australian Securities and Investments Commission are likely to result in changes to the class order governing the bodies, particularly an extension in the time period for compliance to the end of the year. But changes to the “conceptual position” are not likely.

Group purchasing bodies – usually organisations like associations, industry bodies, sporting clubs and community groups – organise risk insurance products for members but unlike brokers don’t provide specific advice.

Class Order 08/1 is intended to provide relief to the bodies from having to comply with the relevant licensing requirements. To be exempted they must determine their own eligibility and meet new disclosure and liability requirements.

But NIBA – which is acting on behalf of members who deal with the bodies – says the “complexity and limited scope” of the class order relief makes it “practically unworkable”.

“Very few group purchasing bodies are likely to be able to work out whether they are eligible to rely on the relief, and whether they comply with the conditions that apply when relief is available,” regulatory specialist Mark Radford, a partner at law firm Colin Biggers & Paisley, told insuranceNEWS.com.au.

NIBA is now understood to be discussing the matter directly with the Federal Treasury in an attempt to find a more reasonable and less complicated approach.