New FSR Act regulations related to claims-handling and settlement provide a licensing exemption that will go some way to easing the concerns of loss adjusters. Agreed to at the last minute by the Treasury, the regulations now exempt a person from needing a financial services licence where the financial service is provided to an insurer, and consists only of either or both of the handling of claims and the settlement of claims in relation to an insurance product.

Leo Fluitsma, President of the Australasian Institute of Chartered Loss Adjusters, said the change, while welcome, doesn’t clear up the matter completely for his members. “Loss adjusters quite often work outside the area of straight insurance products, and I’m still concerned about some of the ‘financial advice’ aspects that will have to be sorted out in the future.”

Legal expert Mark Radford, a partner at Blake Dawson Waldron, said the result is a good one given no exemption was agreed to by Treasury until the last minute. “Submissions made by industry sought that the exemption apply to claims handling and settlement whether on behalf of insurers or insureds,” he said.

“If left as is, there will be a differentiation between those providing claims-handling services on behalf of insurers and those on behalf of insureds. For example, at present, an insurance broker or loss adjuster acting for the insured in relation to claims-handling that provides advice could be caught and require a licence.”

Mr Radford said the Government appears to have taken the view that those who provide financial product advice to clients in relation to the handling or settlement of claims should be caught by the new regulations. “Further submissions on this issue will need to be made.”