ASIC reduces administrative burden for authorised representatives appointing claims handling staff

ASIC has issued relief to reduce the administrative burden on general insurance industry participants of notifying ASIC of large numbers of employees who provide claims handling and settling services on their behalf.

ASIC has made a legislative instrument, ASIC Corporations (Notification of Authorised Representatives) Instrument 2022/301, which exempts Authorised Representatives from the requirement to notify ASIC of the sub-authorisation of employees who provide a claims handling and settling service on their behalf. Authorised Representatives are persons (including companies) authorised to provide a financial service on behalf of an Australian Financial Services (AFS) licensee.

For example, a company engaged as an Authorised Representative to conduct claims management for an insurer may sub-authorise hundreds of employees. Without relief, the company would need to notify ASIC of any authorisation, change in details or revocation of authorisation for each of these employees.

The administrative burden caused by requiring Authorised Representatives to notify ASIC of each sub-authorisation and change in details of employees would be burdensome for industry, while producing limited consumer benefit.

The relief does not limit the substantive obligations that Authorised Representatives and AFS licensees owe to consumers. Consumers with complaints about the provision of a claims handling and settling service provider, or the conduct of an Authorised Representative or its employees, will still have access to the internal dispute resolution processes of the AFS licensee.

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