On 12 November 2020 the Treasurer, the Hon Josh Frydenberg MP, introduced to the House of Representatives the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020. The Bill passed both houses on 10 December 2020. This Bill included legislation to implement recommendation 4.8 of the Financial Services Royal Commission that makes insurance claims handling a financial service. The legislation creates a licensing requirement for claimant intermediaries, defined as a person who carries on a business of representing people to pursue insurance claims in exchange for a monetary or non-monetary benefit, or a benefit provided to another party.
Claimant intermediaries who carry on a business representing consumers to pursue claims are required to:
- obtain an Australian financial services licence covering claims handling;
- comply with the general obligations under section 912A of the Corporations Act, including the obligation to:
- provide claims handling services efficiently, honestly and fairly; and
- have a compliant internal dispute resolution process in place and be a member of AFCA (if the consumer is a retail client); and
- give the consumer a Financial Services Guide if the consumer is a retail client.
The exposure draft regulations attached prescribe circumstances in which a person is not a claimant intermediary.
Financial Sector Reform (Hayne Royal Commission Response) Bill 2020