Who must 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.

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).

Applies when the business has industry: General insurers.

How the regulator frames it: 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.

Jurisdiction: Commonwealth law, so the test is the same in every state and territory.

Outcome across the 35 industries Rules Mate maps (1 of 35: yes; 34 of 35: no).

Structure does not change the answer in general insurers: for every structure the answer is "yes".

Size does not change the answer in general insurers: at every size band the answer is "yes".

Each line is one run of the Rules Mate applicability engine for a single business profile, with the reason the engine gives:

• Pty Ltd company in general insurers with 6–19 employees, turnover $1M–$3M: applies. Industry: General insurers.
• Pty Ltd company in real estate agents with 6–19 employees, turnover $1M–$3M: does not apply. Requires industry: General insurers.

When due

Continuous.

Frequency

Ongoing

Evidence to keep

AFSL authorisation, claims-handling policy, complaints register, supervision records.

Status

Current

Priority

Critical

Maximum penalty: Civil penalties to the financial-services maximum ($18.2M / 3× / 10% turnover)

Rules Mate has not yet classified the audit or assurance level for this obligation. Any audit, review or certification requirement is set by the regulator source listed below.

• ASIC v Westpac (insurance claims handling) (2024): Claims handling is a financial service since 2022; failure to honour TMD / handling promises = civil penalty exposure.

If this obligation applies to you, so does this one: the engine uses the same rule for each.

• Manage business interruption claim definitions (post-pandemic precedent)

• Comply with General Insurance Code of Practice (ICA): ICA Code binds member insurers on conduct + claims + complaints.
• Comply with Private Health Insurance Act 2007 + APRA rules: Private health insurers regulated by APRA + PHIO; community rating, complaints + claims rules apply.
• General Insurance Code of Practice 2020: ICA member insurers bound by service standards + claims handling timeframes.
• Life Insurance Code of Practice 2.0: FSC member life insurers bound by Code 2.0 (commenced 1 July 2023).
• PHI Prudential Standards (APRA): Private health insurers must meet capital + governance standards.

Rules Mate tracks 8 published obligations tagged "insurance", 1 of them rated critical. For a professional services Pty Ltd company with 6–19 employees operating in every state, 0 of those apply outright. This obligation is rated critical priority, and is an ongoing duty.

Regulated by Australian Securities and Investments Commission and Australian Financial Complaints Authority.

ASIC: Corporate regulator administering the Corporations Act, financial services and credit licensing (AFSL/ACL), markets supervision, insolvency, and registries (ASIC and ABRS).

AFCA: External dispute resolution body for financial services, credit, insurance, and superannuation complaints. Mandatory member scheme.

• Australian Securities and Investments Commission
• Australian Financial Complaints Authority

Corporations Act: The foundational federal Act for Australian corporate law.

• Corporations Act 2001

Free tools that help with this obligation:

• Compliance calendar builder