ASIC has released a new regulatory guide (RG 275) and published ASIC (Information under the Deferred Sales Model for Add-On Insurance) Instrument 2021/632 which prescribes the information to be given to a customer, and the form and manner in which it is to be given, for the purposes of starting the add-on insurance deferral period as part of the Deferred Sales Model contained in Subdivision DA of Division 2 of Part 2 of the ASIC Act.
UPDATE: see also
Australian Securities and Investments Commission Amendment (Deferred Sales Model) Regulations 2021
Corporations (Fees) Amendment (Deferred Sales Model Exemptions) Regulations 2021
RG 275 explains which products are subject to the deferred sales model and who must comply with the requirements under the deferred sales model.
The deferred sales model introduces a mandatory four-day pause between the sale of a principal product or service and the sale of add-on insurance.
All conditions prescribed in the instrument must be satisfied in order to start an add-on insurance deferral period (deferral period) under subsection 12DP(1) of the Act.
A customer cannot be sold an add-on insurance product (as defined in section 12DO) of the Act) unless there has been an add-on insurance deferral period and it has ended (section 12DQ of the Act). A deferral period ends at the end of 4 days after the day on which it begins (paragraph 12DP(1)(b) of the Act).
The instrument provides that there are two ways the prescribed information may be given: by electronic communication or in hard copy. Provision by electronic communication is the default manner of provision, as long as the person giving the information is satisfied that the customer can receive it that way.
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Author: David Jacobson
Principal, Bright Corporate Law
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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.
