Maintain adequate PI insurance (AFSL holders, RG 126)
AFSL holders providing financial services to retail clients must hold adequate professional indemnity insurance.
Who must comply
AFSL holders dealing with retail clients (most AFSLs).
What triggers it
Holding an AFSL with retail authorisations.
When due
Continuous; PI renewal annually.
Evidence required
PI policy certificate, broker confirmation of coverage features, ASIC compensation arrangement notification.
Max penalty
Breach of s 912A general obligations; ASIC licence conditions or suspension
Summary
Section 912B and ASIC RG 126 require AFSL holders that deal with retail clients to hold adequate PI insurance covering financial services activities. ASIC sets minimum cover levels (currently at least $2M for any one claim) and limited exclusions. EDR-related cover must be included.
Enforced by
Source legislation
Entity types
Topics
Source: https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-126-compensation-and-insurance-arrangements-for-afs-licensees/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.