Comply with claims handling + settling as a financial service (s 766A)
From 1 January 2022, insurance claims handling is a financial service requiring AFSL authorisation.
Who must comply
Insurers, claims handlers, run-off insurers, loss assessors providing claims-handling services to retail clients.
What triggers it
Providing claims-handling services to retail clients.
When due
Continuous.
Evidence required
AFSL authorisation, claims-handling policy, complaints register, supervision records.
Max penalty
Civil penalties to the financial-services maximum ($16.5M / 3× / 10% turnover)
Summary
Following Royal Commission recommendation 4.8, claims handling + settling services were made a 'financial service' under the Corporations Act. Insurers + claims handlers must hold appropriate AFSL authorisations, comply with s 912A general obligations + IDR (RG 271).
Enforced by
Source legislation
Industries
Topics
Related obligations
- CWLTHComply with Private Health Insurance Act 2007 + APRA rulesPrivate health insurers regulated by APRA + PHIO; community rating, complaints + claims rules apply.
- CWLTHComply with General Insurance Code of Practice (ICA)ICA Code binds member insurers on conduct + claims + complaints.
- CWLTHManage business interruption claim definitions (post-pandemic precedent)BI insurance policies must clearly define pandemic exclusions per Federal Court guidance.
- CWLTHGeneral Insurance Code of Practice 2020ICA member insurers bound by service standards + claims handling timeframes.
- CWLTHLife Insurance Code of Practice 2.0FSC member life insurers bound by Code 2.0 (commenced 1 July 2023).
- CWLTHPHI Prudential Standards (APRA)Private health insurers must meet capital + governance standards.
Frequently asked questions
- Who must comply with claims handling + settling as a financial service (s 766A)?
- Insurers, claims handlers, run-off insurers, loss assessors providing claims-handling services to retail clients.
- What triggers claims handling + settling as a financial service (s 766A)?
- Providing claims-handling services to retail clients.
- When is claims handling + settling as a financial service (s 766A) due?
- Continuous.
- What is the maximum penalty for claims handling + settling as a financial service (s 766A)?
- Civil penalties to the financial-services maximum ($16.5M / 3× / 10% turnover)
- What evidence is required for claims handling + settling as a financial service (s 766A)?
- AFSL authorisation, claims-handling policy, complaints register, supervision records.
Source: https://asic.gov.au/regulatory-resources/financial-services/insurance-product-claims-handling/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.