Insurers have been granted a 12-month extension to prepare for new disclosure requirements – a decision hailed by one legal expert as “a great result”.

Financial Services Minister Chris Bowen has announced authorised deposit-taking institutions (ADIs) and general insurers must now abide by new disclosure rules for product disclosure statements (PDS) by October 12, 2011.

Insurers were previously given until next month to adhere to new regulations announced last year as part of the Corporations Amendment Regulations Act 2005. Mr Bowen says the extension was granted in response to industry submissions.

The regulations require ADIs and general insurers to provide information relating to the Financial Claims Scheme in PDS statements.

The scheme, which provides absolute guarantees for Australian banks, credit unions and building societies of up to $1 million, was initiated in late 2008 at the height of the credit crunch to protect depositors. It will be directly administered by the Australian Prudential Regulation Authority (APRA).

“These regulations implement the objective of informing customers about the relationship between the Financial Claim Scheme and banking and insurance products,” Mr Bowen said.

Colin Biggers & Paisley Partner Mark Radford says the industry has been lobbying hard for an extended deadline. “It’s a great result,” he said.

In February Mr Bowen released draft legislation that would significantly expand APRA’s role to probe insurers, compel compliance and take swift action to save failing institutions.

The sweeping legislation, called the Financial Sector Legislation Amendment Bill, will amend more than seven separate acts.