๐—”๐—น๐—ถ๐—ด๐—ป๐—บ๐—ฒ๐—ป๐˜ ๐—ผ๐—ณ ๐—ฐ๐—ผ๐—บ๐—ฝ๐—น๐—ถ๐—ฎ๐—ป๐—ฐ๐—ฒ ๐—ผ๐—ฏ๐—น๐—ถ๐—ด๐—ฎ๐˜๐—ถ๐—ผ๐—ป๐˜€ ๐˜๐—ผ ๐˜๐—ต๐—ฒ ๐—–๐˜‚๐˜€๐˜๐—ผ๐—บ๐—ฒ๐—ฟ ๐—ถ๐—ป๐˜€๐˜‚๐—ฟ๐—ฎ๐—ป๐—ฐ๐—ฒ ๐˜€๐—ฎ๐—น๐—ฒ๐˜€ ๐—ฒ๐˜…๐—ฝ๐—ฒ๐—ฟ๐—ถ๐—ฒ๐—ป๐—ฐ๐—ฒ

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  • ๐—”๐—น๐—ถ๐—ด๐—ป๐—บ๐—ฒ๐—ป๐˜ ๐—ผ๐—ณ ๐—ฐ๐—ผ๐—บ๐—ฝ๐—น๐—ถ๐—ฎ๐—ป๐—ฐ๐—ฒ ๐—ผ๐—ฏ๐—น๐—ถ๐—ด๐—ฎ๐˜๐—ถ๐—ผ๐—ป๐˜€ ๐˜๐—ผ ๐˜๐—ต๐—ฒ ๐—–๐˜‚๐˜€๐˜๐—ผ๐—บ๐—ฒ๐—ฟ ๐—ถ๐—ป๐˜€๐˜‚๐—ฟ๐—ฎ๐—ป๐—ฐ๐—ฒ ๐˜€๐—ฎ๐—น๐—ฒ๐˜€ ๐—ฒ๐˜…๐—ฝ๐—ฒ๐—ฟ๐—ถ๐—ฒ๐—ป๐—ฐ๐—ฒ

When speaking to clients who are concerned about the complexity of compliance, I advise aligning compliance obligations with the customer experience.

This enables us to think about compliance in a logical, systematic manner. The risk of non-compliance, regulatory enforcement action & customer detriment is managed.

๐™๐™๐™š ๐™ž๐™ฃ๐™จ๐™ช๐™ง๐™–๐™ฃ๐™˜๐™š ๐™จ๐™–๐™ก๐™š๐™จ ๐™ฅ๐™ง๐™ค๐™˜๐™š๐™จ๐™จ – 3 ๐™ฅ๐™ง๐™š๐™ก๐™ž๐™ข๐™ž๐™ฃ๐™–๐™ง๐™ฎ ๐™ฆ๐™ช๐™š๐™จ๐™ฉ๐™ž๐™ค๐™ฃ๐™จ

Answering 3 simple questions sets the signage for the customer sales pathway.

1. Is the client retail or wholesale?

It is important to understand the disclosure documents & warnings that must be provided.

This is a 2 step process.

a) is the customer an individual or small business (as defined)? If yes, keep going, no = wholesale client

b) does the product fall within s761G(5)(b) Corps Act as defined in Regs 7.1.11 – 7.117A? if yes = retail, if no = wholesale.

2. Is this a consumer insurance contract?

This is important to determine whether the duty to take reasonable care not to make a misrepresentation or the Duty of disclosure applies.

Either:
a) falls within the definition of s11AB Insurance Contracts Act; or
b) is deemed to be a consumer insurance contract by the insurer giving a written notice to that effect

3. Are you a Distributor (GI Code) or a [NIBA member] Insurance broker or AR of a broker (Brokers Code).

This determines whether the standards & obligations of the relevant industry Codes apply to you during the sales process

๐™๐™๐™š ๐™˜๐™ช๐™จ๐™ฉ๐™ค๐™ข๐™š๐™ง ๐™ž๐™ฃ๐™จ๐™ช๐™ง๐™–๐™ฃ๐™˜๐™š ๐™จ๐™–๐™ก๐™š๐™จ ๐™ฅ๐™ง๐™ค๐™˜๐™š๐™จ๐™จ

Once you have the information, it is relatively easy to map compliance obligations to each stage of the customer insurance sales process

As an example – a retail client for a consumer insurance contract & you are an insurance broker acting for an insured

or in plain language, a new client asks about insurance for their home.

๐˜ผ๐™ฉ ๐™š๐™ฃ๐™œ๐™–๐™œ๐™š๐™ข๐™š๐™ฃ๐™ฉ

provide the client with:

1. Terms of engagement (Brokers Code)
2. FSG (AFSL requirement)

๐™‰๐™š๐™š๐™™๐™จ ๐™–๐™ฃ๐™–๐™ก๐™ฎ๐™จ๐™ž๐™จ

1. provide a warning – general or personal advice [AFSL]
2. understand the insurers or underwriting agency’s underwriting questions to respond to the insured’s duty to take reasonable care not to make a misrepresentation [Insurance Contracts Act]
3. Disclose $$ remuneration (or an estimate & the actual amount as soon as reasonably practicable) [Code]
4. ensure the client falls within the relevant TMD [AFSL]

๐™Œ๐™ช๐™ค๐™ฉ๐™ž๐™ฃ๐™œ ๐™จ๐™ฉ๐™–๐™œ๐™š

1. Provide the PDS [AFSL]

๐™ˆ๐™–๐™ฅ๐™ฅ๐™ž๐™ฃ๐™œ ๐™ฉ๐™๐™š ๐™จ๐™–๐™ก๐™š๐™จ ๐™ฅ๐™ง๐™ค๐™˜๐™š๐™จ๐™จ

There may be other obligations that arise during the sales process such as misleading or deceptive conduct, hawking etc however you can see that this is merely a case of mapping out the sales process & assigning the compliance obligation at each stage