Lawyers and super fund trustees will not have to abide by new licensing restrictions on handling of insurance claims, but advisers will need to gain additional authorisation to handle a claim for a client under royal commission legislation recently introduced to Parliament, according to information released by the corporate regulator.
ASIC’s draft information sheet ‘Claims handling and settling: How to comply with your AFS licensing obligations’, released on Friday, noted that advisers providing a claims handling and settling service on behalf of an insurer would now need to hold a claims handling authorisation as part of their licence.
The sheet noted that “claimant intermediaries”, or those who “carry on a business of representing insured people in pursuing a claim and do so in return for any benefit, monetary or otherwise”, would also need to hold an AFS licence.
However, ASIC said exemptions would apply for general purposes under section 911A(2)(e)(k) of the Corporations Act for super trustees and others commonly involved in the claims process, such as loss adjusters or investigators. ASIC said trustees' obligations to members in the claims handling process were covered under their licence authorisation to provide "a superannuation trustee service", and that all super entities would need to hold this type of authorisation by 1 January 2021.
The sheet also stated that “professional legal services provided by a lawyer in a professional capacity relating to insurance claims handling and settling” would be among the services specifically exempt from the requirements.
Commenting on the exemption, a spokesperson for compensation law firm Maurice Blackburn said lawyers acting in the space were already “regulated by their own industry professional practice rules, hold practicing certificates and are subject to Legal Services Commissioners”.
The reforms around claims handling are contained in royal commission legislation introduced to Parliament earlier this month, and are due to come into effect by 1 January 2022.
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