Regulation - Deferred Sales Model Exemptions

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Consultation Type
Exposure Draft

Key Documents


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. The Bill included legislation to establish an industry-wide deferred sales model (DSM) for add-on insurance in response to recommendation 4.3 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

The deferred sales model will enable consumers to make informed decisions on add-on insurance product purchases. It will do so by introducing a pause in the sales process between the purchase of the primary product and the purchase add-on insurance. This pause, or ‘deferral period’, will enable and encourage consumers to consider the merits of the insurance offered and to compare this insurance with alternative products.

Class Exemptions

Under section 12DX of the Australian Securities and Investments Commission Act 2001, a class of add-on insurance products may be provided an exemption through regulations. An exemption may be subject to conditions.

Treasury held public consultation in January 2021 inviting stakeholders to provide evidence for any classes of add-on insurance products that represent a very high level of consumer value where it would not be appropriate that they be captured by the deferred sales model.

On 8 July 2021 the Treasurer announced the Government intended to exempt a number of add-on insurance classes. The exposure draft regulations prescribe those classes of add-on insurance products that will be exempt from the DSM.


The Deferred Sales Model will be effective from 5 October 2021. Any add-on insurance products without an exemption in place at that time will be subject to the Deferred Sales Model from that date.

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