ASIC has registered ASIC Corporations (Incidental Retail Cover) Instrument 2022/716 which exempts insurers and brokers from certain retail client obligations in Chapter 7 of the Corporations Act 2001 (Cth) for ‘incidental retail cover’ provided in business insurance contracts. Incidental retail cover refers to retail insurance cover provided to a business that forms a minor, incidental, and inseparable part of an otherwise wholesale insurance product.
The purpose of the Instrument is to exempt general insurers and insurance brokers from retail client obligations in parts of Chapter 7 in limited circumstances where a bundled general insurance contract includes incidental retail cover, by permitting the insurer or broker to treat the client as a wholesale client.
The relief is subject to the following conditions:
(a) the incidental product is provided under a bundled insurance contract that includes another general insurance product that is provided to the person as a wholesale client (wholesale product);
(b) the incidental product is incidental to the wholesale product;
(c) the incidental product is included in the contract of insurance without a separate decision or election made in relation to the incidental product;
(d) the issuer of the incidental product and of the wholesale product does not offer the incidental product as a standalone product on the same terms; and
(e) no separate premium is payable by the person who acquires the wholesale product for the inclusion of the incidental product in the contract of insurance.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
