Today’s list covers the top 5 groups that influenced complianceย for the insurance industryย during 2023. ๐ก๐ผ. ๐ฑ ๐๐ป๐๐๐ฟ๐ฒ๐ฟ๐ APRA-regulated insurers make it onto my list due to a number of factors. With substantial resources (particularly the larger insurers), insurers have the internal numbers to implement complex & robust compliance arrangements, this sets expectations & a benchmark for best practice; Given insurers dominate the insurance landscape, especially retail insurance, the focus of regulators & industry bodies is always on Suncorp, IAG, QBE, Allianz, Hollard et al Insurers in turn drive the compliance measures at MGAs & TPAs. Due to FAR & CPS 230, this will continue into 2024/25 extending to insurance brokers. ๐ก๐ผ ๐ฐ. ๐๐ป๐ฑ๐๐๐๐ฟ๐ ๐ฏ๐ผ๐ฑ๐ถ๐ฒ๐ The Insurance Council of Australia, CGC, National Insurance Brokers Association (NIBA) & IBCCC continue to heavily influence & drive compliance positions across the industry. In addition, Insurtech Australia & Underwriting Agencies Council (UAC) have also been leading the way in respect of technology & the emergence of underwriting agencies. ๐ก๐ผ ๐ฏ. ๐๐ป๐ฑ๐๐๐๐ฟ๐ ๐๐ผ๐ฑ๐ฒ๐ The GI Code of Practice has always been a heavy influence on the compliance programs for insurers (& MGAs & TPA’s) however the Insurance Brokers Code of Practice has been remarkable in driving the compliance focus for insurance brokers. This has been particularly evident for brokers with large Authorised Representative networks. ๐ก๐ผ ๐ฎ. ๐ฅ๐ฒ๐ด๐๐น๐ฎ๐๐ผ๐ฟ๐ ASIC, Australian Prudential Regulation Authority &, while technically not a regulator, Australian Financial Complaints Authority have continued to have a strong influence on compliance across the insurance industry. From taking Federal Court action on pricing promises to shutting down an insurer & its underwriting agency partners for 24 hours due to a defective TMD to CPS 230 & AFCA determinations, the regulators continue to set the direction & focus on compliance for the insurance industry. ๐ก๐ผ ๐ญ ๐๐ผ๐บ๐ฝ๐น๐ถ๐ฎ๐ป๐ฐ๐ฒ ๐ฃ๐ฒ๐ผ๐ฝ๐น๐ฒ ๐ ๐ฅ The Gold Medal for 2023 in successfully driving compliance are the unsung heroes – people, specifically the person(s) within each organisation who drives & champions compliance. The better compliance people manage to find the right balance between compliance & business & focus their efforts on raising internal awareness, training & education. The Compliance Champions forย 2023 and the top influencers on Compliance within the Insurance industry for 2023 are our wonderful compliance people.
ASIC has issued a letter reminding general insurers of their obligations as Australian financial services (AFS) licensees when handling insurance claims, especially in response to severe weather events. (ASIC’s letter was published on 6th March 2024). The letter sets out the obligations general insurers have as AFS licensees under the Corporations Act 2001 (Cth). General insurers are required to act efficiently, honestly, & fairly when providing claims handling services: see section 912A. This includes resolving claims in a timely manner, especially when responding to claims relating to severe weather events. Insurers are required to: – communicate transparently, clearly & in a timely way with consumers regarding their claims – effectively project manage third parties, including assessors & tradespeople – identify complaints and expressions of dissatisfaction at the earliest opportunity – recognise consumers experiencing vulnerability & tailor their claims handling service accordingly, & sufficiently resource claims handling & dispute resolution functions, & ensure staff are adequately trained. Insurance claims handling is an enforcement priority for ASIC in 2024. ASIC is monitoring claims handling through reports of misconduct made directly to ASIC, any systemic issues reported by AFCA, and regular contact with consumer groups assisting people with claims & related disputes. ASIC’s message is they are watching how insurers support their customers very closely. Evidence of significant misconduct identified through these channels may result in enforcement action. ๐พ๐ค๐ข๐ฅ๐ก๐๐๐ฃ๐๐ ๐ง๐๐ซ๐๐๐ฌ ๐ค๐ ๐๐ก๐๐๐ข๐จ ๐๐๐ฃ๐๐ก๐๐ฃ๐ ๐ฅ๐ง๐๐๐ฉ๐๐๐๐จ It may be prudent to conduct a compliance review of your claims handling & settling practices including service suppliers. The review should also cover GI Code of Practice obligations. A compliance review assesses the adequacy of your compliance arrangements to manage AFSL & Code obligations & provides solutions adopting a risk-based approach. Underwriting Agencies with AFSL claims authorisation & Insurance Claims Managers (TPA) should also consider a compliance review. Contact me to explore how I can assist.
As a compliance specialist, I always read adverts from insurers, underwriting agencies, insurance brokers etc I analyse the inherent compliance risk arising from the advertisement. ๐๐๐จ๐ก๐๐๐๐๐ฃ๐ ๐ค๐ง ๐๐๐๐๐ฅ๐ฉ๐๐ซ๐ ๐๐ค๐ฃ๐๐ช๐๐ฉ Advertising gives rise to the risk of engaging in misleading or deceptive conduct. Generally speaking, misleading or deceptive conduct leads a person into error. Engaging in Misleading or deceptive conduct is a reportable situation to ASIC. ASIC’s regulatory guide RG 234, helps licensees & promoters comply with their legal obligations to not make false or misleading statements or engage in misleading or deceptive conduct. ๐๐ค๐ค๐ ๐๐ง๐๐๐ฉ๐๐๐ ๐๐ช๐๐๐๐ฃ๐๐ RG 234.16 contains an overview of ASIC’s good practice guidance for advertising in all media: Returns, features, benefits & risks – a balanced message between benefits & risks should be provided. Benefits should not be given undue prominence compared with risks; Warnings, disclaimers, fine print & qualifications should not be inconsistent with other content in an advertisement, including any headline claims; Where a fee or cost is referred to in an advertisement, it should give a realistic impression of the overall level of fees & costs a consumer is likely to pay, including any indirect fees or costs; Comparisons should only be made between products that have sufficiently similar features or, where an advertisement compares different products, the differences should be made clear in the advertisement; Past performance information should be accompanied by a warning that past performance is not indicative of future performance; Terms and phrases should not be used in a particular way by industry where these are not consistent with the ordinary meaning commonly recognised by consumers (e.g. โfreeโ, โsecureโ & โguaranteedโ); Advertisements should be capable of being clearly understood by the audience that might reasonably be expected to see the advertisements; Where an advertisement draws attention to specific product features, the advertisement should be consistent with information contained in any disclosure document (such as a PDS); Photographs & images should not contradict, detract from or reduce the prominence of any warnings, disclaimers or qualifications; & Advertisements for a financial advice service should not create unrealistic expectations about what the service can achieve. In certain media, adverts must refer to the PDS & TMD ๐๐ซ๐๐ง๐๐ก๐ก ๐๐ข๐ฅ๐ง๐๐จ๐จ๐๐ค๐ฃ ๐ค๐ ๐ฉ๐๐ ๐ผ๐๐ซ๐๐ง๐ฉ Assessing the overall impression is important. ASIC considers the following factors: a) the subject; b) the content; c) the format; d) the audience; e) the media used; & f) the likely effect of the advertisement
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. ๐๐๐ ๐๐ฃ๐จ๐ช๐ง๐๐ฃ๐๐ ๐จ๐๐ก๐๐จ ๐ฅ๐ง๐ค๐๐๐จ๐จ – 3 ๐ฅ๐ง๐๐ก๐๐ข๐๐ฃ๐๐ง๐ฎ ๐ฆ๐ช๐๐จ๐ฉ๐๐ค๐ฃ๐จ 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 ๐๐๐ ๐๐ช๐จ๐ฉ๐ค๐ข๐๐ง ๐๐ฃ๐จ๐ช๐ง๐๐ฃ๐๐ ๐จ๐๐ก๐๐จ ๐ฅ๐ง๐ค๐๐๐จ๐จ 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. ๐ผ๐ฉ ๐๐ฃ๐๐๐๐๐ข๐๐ฃ๐ฉ provide the client with: 1. Terms of engagement (Brokers Code) 2. FSG (AFSL requirement) ๐๐๐๐๐จ ๐๐ฃ๐๐ก๐ฎ๐จ๐๐จ 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] ๐๐ช๐ค๐ฉ๐๐ฃ๐ ๐จ๐ฉ๐๐๐ 1. Provide the PDS [AFSL] ๐๐๐ฅ๐ฅ๐๐ฃ๐ ๐ฉ๐๐ ๐จ๐๐ก๐๐จ ๐ฅ๐ง๐ค๐๐๐จ๐จ 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
A common question I’m asked is the timing to provide disclosure documents & other notices. The source of the obligation – Act, Regs or Code includes the timing & content requirements for each document & by whom & to whom provided. The requirements depend on the type of client (retail or wholesale), what you do & who you represent (broker representing an insured or MGA/TPA representing an insurer, or an insurer). ๐ฆ๐๐บ๐บ๐ฎ๐ฟ๐ ๐ญ๐บ๐ฎ An AFS Licensee or their AR must give a FSG to a retail client as soon as practicable after it becomes apparent that a financial service will be provided to that client & before a financial service is provided. It is industry best practice to provide an FSG to wholesale clients. Insurance brokers should be aware that an FSG may be given after the services have been provided in ‘time critical’ cases such as an impending policy due date (4pm). Brokers can also provide the ‘Terms of engagement’ (part 4.2 Brokers Code) at the same time as providing an FSG. Insurance Claims Managers do not need to provide an FSG (as they act for insureds) but Claimant Intermediaries must. ๐ฆ๐ข๐ A Statement of Advice must be provided where personal advice is provided to a retail client for sickness & accident & CCI insurance products. The SOA must be provided when or as soon as practicable after providing the advice. ๐๐ฒ๐ป๐ฒ๐ฟ๐ฎ๐น ๐ฎ๐ฑ๐๐ถ๐ฐ๐ฒ ๐๐ฎ๐ฟ๐ป๐ถ๐ป๐ด A GAW must be provided at the same time & in the same format as when general advice is provided to retail clients. If the GA is provided on a website or in a document the GAW must be included. ๐ท๐ซ๐บ Generally, a product issuer (insurer or MGA) must provide a PDS to a retail client when making an offer (quote) or sale. A broker should ensure a PDS is provided when making a recommendation to a retail client to buy an insurance product. ๐ป๐ด๐ซ A TMD must be made publicly available before any person distributes a financial product that is subject to the design & distribution obligations ie ‘retail product distribution’. Generally the TMD is available on issuers websites with links provided in relevant documents. ๐ช๐๐๐ ๐บ๐๐๐๐๐๐๐๐๐ ๐ญ๐๐๐ ๐บ๐๐๐๐ & ๐ช๐๐๐๐๐๐๐๐๐๐๐ ๐๐ ๐ป๐๐๐๐๐๐๐๐๐๐๐ A CSFS must be provided by insurers (or TPA) to retail clients before a cash payment is made where there are other legally available options to settle the claim. A CoT must be provided as is reasonably practicable after the transaction with the retail client occurs & includes acceptance & settlement of an insurance claim. A CSFS may be provided up to 5 days after the payment in cases of ‘immediate need’. A CSFS or CoT is not required in family violence situations. ๐ผ๐ญ๐ฐ Brokers must provide a written notice to a client when placing business with an Unauthorised Foreign Insurer when relying upon 1 of the 4 exceptions. Contact me to understand all your disclosure & notices obligations.
The regulatory regime for providing insurance products & services in Australia is complex. Financial services laws, ASIC Reg Guides, APRA Prudential Standards, GI & Brokers Code of Practice, and Agreements (binder, agency, distribution & claims) create a plethora of obligations with severe consequences for non-compliance. The primary purpose of compliance is to protect. Protect the business, its people, customers & other key stakeholders. How do you ensure that you achieve this purpose & not get pulled down the ‘tick-a-box checklist’ pathway that creates a multitude of rules, instructions & documents? Here are some tips to effectively & efficiently manage the complexities of compliance: ๐๐ฎ๐จ๐ฉ๐๐ข๐๐ฉ๐๐ ๐๐ฅ๐ฅ๐ง๐ค๐๐๐ Compliance management requires an operating rhythm. Adopting a systematic approach to compliance ensures that your compliance measures provide optimum protection to the business, its people & customers. ๐พ๐ก๐๐๐ง ๐ง๐ค๐ก๐๐จ & ๐ง๐๐จ๐ฅ๐ค๐ฃ๐จ๐๐๐๐ก๐๐ฉ๐๐๐จ Clarity around roles & responsibilities creates accountability. It also drives efficiencies & avoids gaps or duplication. Typically, the business performs the compliance task & activities while risk & compliance functions (or a risk & compliance committee) provide monitoring & oversight. ๐๐๐ช๐๐๐ฉ๐๐ค๐ฃ & ๐๐ฌ๐๐ง๐๐ฃ๐๐จ๐จ Compliance is complex, and training is essential. The training for employees & Authorised Reps must be practical, business-focused & lead people to understand why they should care. Caring results in doing. ๐๐๐ ๐๐ค๐๐ฃ๐ A well-crafted document doesn’t provide protection. The protection comes from people reporting incidents, breaches & complaints; from undertaking compliance training in a timely fashion; from following systems & procedures & with a genuine desire to play their part in protecting the business, colleagues & customers. ๐๐ค๐ฃ๐๐ฉ๐ค๐ง๐๐ฃ๐ & ๐จ๐ช๐ฅ๐๐ง๐ซ๐๐จ๐๐ค๐ฃ ‘You can’t see the forest for the trees’. Successful compliance arrangements include those who are doing with an added layer of protection provided by monitoring & supervision. There needs to be a degree of independence between doing & oversight. ๐ฟ๐๐ฉ๐ & ๐ง๐๐ฅ๐ค๐ง๐ฉ๐๐ฃ๐ A systematic approach to compliance produces data, lots of data. To be meaningful, this data must be analysed. To be valuable, this data must be reported. A systematic approach to compliance includes the use of data to validate the health of the compliance arrangements. ๐๐ซ๐๐๐๐ฃ๐๐ ๐๐๐จ๐๐ Effective documentation helps to educate, raise awareness & demonstrate whether or not you are complying with your obligations. Documentation also provides a transparent benchmark for accountability. ๐๐๐จ๐ & ๐พ๐ค๐ข๐ฅ๐ก๐๐๐ฃ๐๐ ๐๐ค๐ซ๐๐ง๐ฃ๐๐ฃ๐๐ The combination of the above elements provides good Governance ensuring that compliance is protected. Contact me should you need assistance with your Compliance measures.
๐ป๐๐ ๐๐๐๐๐๐๐๐๐๐ AFS Licensees must have in place adequate arrangements for the management of conflict of interest (s912A(1)(aa) Corps Act). Conflicts of interest are circumstances where some or all of the interests of people (clients) to whom a licensee (or its representative) provides financial services are inconsistent with, or diverge from, some or all of the interests of the licensee or its representatives. This includes actual, apparent & potential conflicts of interest. (RG 181.15) ๐๐ฎ๐ฅ๐๐๐๐ก ๐๐ค๐ฃ๐๐ก๐๐๐ฉ๐จ ๐ค๐ ๐๐ฃ๐ฉ๐๐ง๐๐จ๐ฉ ๐ฉ๐๐๐ฉ ๐ข๐๐ฎ ๐๐ง๐๐จ๐ ๐ฌ๐๐ฉ๐๐๐ฃ ๐ฉ๐๐ ๐๐ฃ๐จ๐ช๐ง๐๐ฃ๐๐ ๐๐ฃ๐๐ช๐จ๐ฉ๐ง๐ฎ Some of the typical conflicts that may arise include: – commissions & non-monetary remuneration paid by the issuer of the products (insurers/MGAs) to insurance brokers. Insurance Brokers act on behalf of the insured (refer s11 Insurance Contracts Act & Part 6.0 Insurance Brokers Code of Practice) – having equity or common directors in a brokerage & underwriting agency; – a claims handler or underwriter having a family or personal relationship with the claimant/broker/insured; – having an interest in an outsourced provider; – providing insurance broking services to 2 clients who contract with each other; – receiving gifts or entertainment from a service supplier, insurer etc ๐๐๐ฃ๐๐๐๐ฃ๐ ๐ฉ๐๐ ๐๐ค๐ฃ๐๐ก๐๐๐ฉ The requirement is to adequately manage the conflict. The three mechanisms that licensees would generally use to manage conflicts of interest are: (a) controlling conflicts of interest; (b) avoiding conflicts of interest; & (c) disclosing conflicts of interest Controlling conflicts of interest include: – passing the file to a colleague or another firm to manage & putting in place ‘ethical walls’; – adhering to the firms policies & procedures. This means an underwriter would follow their underwriting guidelines when managing a conflict for eg with a broker; similarly a claims handler would follow the claim guidelines where there is a personal relationship & a broker adhering to internal guidelines for commissions; – dealings with related companies would be conducted at arms-length & on commercial terms. Disclosing (to the parties) – this is commonly via a disclosure document (FSG) or on the website (stating who you act for); – raising & recording on the conflicts or gifts & entertainment register with a senior person sign-off; Avoiding If the conflict can’t be adequately managed through controls or disclosure then it must be avoided. ๐ฟ๐ค๐๐ช๐ข๐๐ฃ๐ฉ๐๐ ๐๐ซ๐๐๐๐ฃ๐๐ It is best practice to document your approach to managing conflicts in a manual or policy & maintaining a conflicts of interest &/or gifts & entertainment register. Staff & representatives must be trained If you would like assistance in implementing mechanisms to manage your conflicts reach out to me.
AFS Licensees have an obligation to ensure that their ๐๐๐๐๐๐๐๐๐๐๐๐๐๐๐ are adequately trained & are competent (s912A(1)(f) Corps Act) ๐ช๐ต๐ผ ๐ถ๐ ๐ฎ ๐ฟ๐ฒ๐ฝ๐ฟ๐ฒ๐๐ฒ๐ป๐๐ฎ๐๐ถ๐๐ฒ? Representative means (s9): – an authorised representative of the licensee; – an employee or director of the licensee; – an employee or director of a related body corporate of the licensee; & – any other person acting on behalf of the licensee. ๐ผ๐๐๐พ’๐จ ๐๐ญ๐ฅ๐๐๐ฉ๐๐ฉ๐๐ค๐ฃ๐จ ASIC expects licensees to: (a) identify the knowledge & skills your representatives need to competently provide the financial services; (b) ensure they have the necessary knowledge & skills; (c) ensure they undertake continuing training programs to maintain & update their knowledge & skills; & (d) maintain a record of the training they have undertaken (this is required under reg 7.6.04(1)(d)). As you will observe, training is an ongoing obligation. ๐๐ง๐๐๐ฃ๐๐ฃ๐ Most firms adopt a CPD approach to training. However, in order to meet the obligation, representatives must be trained in financial services laws & in the specific financial services & insurance products offered. Simply attending functions or events to obtain CPD points may not satisfy the AFSL obligation. The training must have a connection with your authorised financial services. ASIC has specified minimum training for representatives who provide financial product advice to retail clients (RG 146): Tier 1 products – personal sickness & accident, CCI; Tier 2 – all other general insurance products. ๐พ๐ค๐ข๐ฅ๐๐ฉ๐๐ฃ๐๐ Competence includes skill, knowledge & experience. The competence must be aligned to the financial services (such as claims handling or insurance broking) & the products provided. Generally role descriptions, qualifications, short industry courses, on the job training & professional membership (ANZIIF, NIBA) are indicators of competence however on-going training is required to ensure professional development & remaining relevant. ๐๐ง๐๐๐ฃ๐๐ฃ๐ ๐จ๐ฅ๐๐๐๐๐๐๐๐ก๐ก๐ฎ ๐๐ค๐ง ๐ฅ๐๐ค๐ฅ๐ก๐ ๐ฌ๐ค๐ง๐ ๐๐ฃ๐ ๐๐ฃ ๐๐๐ฃ๐๐ง๐๐ก ๐๐ฃ๐จ๐ช๐ง๐๐ฃ๐๐ I have developed training options, specifically for general insurance, to assist in meeting your AFSL obligations: I provide training services to businesses: a) Facilitated training on financial services laws, Industry Codes, Responsible Managers; & b) Design of in-house tailored compliance training modules. Check out ‘Compliance Education & Training’ under the ‘Services’ tab on my website (link below) I provide training services to individuals: a) Compliance workshop in Brisbane 21st Mar b) Monthly virtual financial laws training: next course 14th Mar c) Membership subscription Click below & go the tabs ‘Training’ & ‘Membership’ to learn more & register Compliance Advocacy Solutions
Under-reporting of breaches continues to be an industry-wide issue A business focus on incidents is key to successfully managing breaches ๐๐ค๐๐ช๐จ ๐ค๐ฃ ๐๐ฃ๐๐๐๐๐ฃ๐ฉ๐จ An incident is something that has happened that shouldn’t have (this includes inaction) All people across the business, Authorised Reps, distributors & anyone acting on your behalf should be trained in understanding, identifying & raising incidents If you focus on breaches then you are expecting your people to know ‘000’s laws Your obligations should be linked to key control(s) therefore control breakdowns are automatically an incident. The training should include practical examples of what an incident(s) looks like within your business & for each business area. If your incident management is inadequate, the incident will continue to grow & cause harm & detriment until such time that it manifests into a breach or a significantly larger breach than if immediately detected. There is also the risk that the breach will be identified by a customer. This suggests that your compliance arrangements are inadequate & may lead to a systemic issue investigation by ASIC or AFCA. An incident & breach register should be maintained. ๐๐ง๐๐๐๐ ๐ค๐ ๐๐ฃ๐๐๐๐๐ฃ๐ฉ๐จ It is important that you don’t allow the business to determine whether an incident is a breach. This analysis requires expertise. An experienced compliance person should review all incidents periodically (frequency based on the size of the organisation) & determine whether (1) additional information is required (2) the incident is a breach & if so, (3) the law &/or Code that has been breached & (4) comply with breach reporting requirements ๐๐ค๐ช๐ง๐๐๐จ ๐ค๐ ๐๐ง๐๐๐๐ ๐ค๐๐ก๐๐๐๐ฉ๐๐ค๐ฃ๐จ Each Law/Code has its own requirements on what needs to be reported, to who & the timing Chp 7 Corporations Act (AFS Licensees) – Section 912DAA – note that ‘financial services laws’ is defined widely (s761A) & include, for example, breaches of the Insurance Contracts Act & the ASIC Act. Insurance Act (APRA regulated insurers) – Section 38AA Privacy Act – Division 3 (notifiable data breaches) GI Code of Practice – paragraph 181 Insurance Brokers Code of Practice – paragraph 11.2 Having separate processes for each law/code is impractical, adds complexity & creates gaps. A single breach management process is paramount ๐ฝ๐ง๐๐๐๐ ๐ข๐๐ฃ๐๐๐๐ข๐๐ฃ๐ฉ ๐ฅ๐ง๐ค๐๐๐จ๐จ Your breach management process should incorporate RG 78 with pathways to incorporate the breach reporting requirements of all other laws/industry Codes. The process should include: timeframes roles & responsibilities information gathering analysis breach committee or similar breach reporting remediation & rectification learning from the breach & continual improvement Contact me for assistance with your incident & breach management process.
As the FSG is a legal document it’s important that your FSG has legal sign-off. Copying & pasting the FSG of another should be avoided. A Licensee (s941A) or, independently, an Authorised rep (s940A), must give a person a FSG if a financial service is provided to a retail client. ๐๐๐ข๐๐ฃ๐ ๐ค๐ ๐๐๐ซ๐๐ฃ๐ ๐๐๐ The FSG must be given as soon as practicable after it becomes apparent to the providing entity that the financial service will be, or is likely to be, provided & in any event before the financial service is provided. Generally, for insurance brokers, this means the earlier of, an appointment or when first providing financial product advice. For insurers & underwriting agencies this generally is at the time of making an offer for insurance products (eg a quote). In respect of claims handling & settling services; insurance brokers, underwriting agencies, insurers & insurance claim managers are not required to provide an FSG as the FSG was provided at the time of sale/engagement. However, claimant intermediaries (who act for insureds) must provide an FSG before they provide the financial service. Refer to s941C for situations in which an FSG is not required ๐๐ช๐ฎ๐ฆ ๐ค๐ณ๐ช๐ต๐ช๐ค๐ข๐ญ ๐ค๐ข๐ด๐ฆ๐ด If the client immediately requests the financial service or it is not reasonably practicable to give an FSG before providing the service, a statement may be provided (meeting the requirements of s941D(3)) & the FSG provided within 5 days after the statement. ๐พ๐ค๐ฃ๐ฉ๐๐ฃ๐ฉ๐จ ๐ค๐ ๐ ๐๐๐ The title ‘๐๐ช๐ฏ๐ข๐ฏ๐ค๐ช๐ข๐ญ ๐๐ฆ๐ณ๐ท๐ช๐ค๐ฆ๐ด ๐๐ถ๐ช๐ฅ๐ฆ’ must be on the cover of, or near the front of, the FSG. Thereafter, the abbreviation ‘๐๐๐’, may be used. An FSG must be dated, presented in a clear, concise & effective manner & contain (see s942B also refer to Part 7.7 Div 2 of the regulations): details of the provider including AFSL or AR number the financial services provided who the provider acts for details of remuneration & benefits (incl commission) details of associations or relationships between the provider & issuer (including any related body corporate) for personal advice, details of restricted words or expressions. This includes, for insurance brokers who are paid a commission, that the broker is not independent, impartial or unbiased. information about dispute resolution & how it can be accessed (IDR & EDR) for underwriting agencies details of any binder a statement about PI cover ๐๐ช๐ก๐ฉ๐๐ฅ๐ก๐ ๐๐ค๐๐ช๐ข๐๐ฃ๐ฉ๐จ ss942D & 942DA A FSG may consist of multiple documents such as, for brokers bound by the Code, a ๐๐ฆ๐ณ๐ฎ๐ด ๐ฐ๐ง ๐๐ฏ๐จ๐ข๐จ๐ฆ๐ฎ๐ฆ๐ฏ๐ต however must have on the cover a statement to the effect the document is part of a FSG. For insurers & underwriting agencies, an FSG may be combined with a PDS in a single document.