NIBA critical of Treasury
The National Insurance Brokers Association (NIBA) believes that the implementation of rules relating to Direct Offshore Foreign Insurers (DOFIs) should be delayed by at least three months.
The amendment, which commences on July 1, this year, requires DOFIs to be authorised insurers subject to Australia’s prudential regime.
Federal Assistant Treasurer and Minister for Competition Policy and Consumer Affairs Chris Bowen announced the changes on Monday, but said details of the exemption would be available in late April on the Treasury website.
NIBA chief executive Noel Patterson said he has written to Bowen to tell him that even if draft exposure regulations were made available now, brokers would be unlikely to be able to implement changes by the July 1 deadline.
“For insurance brokers to administer the exemptions effectively, brokers need to review the detailed regulations so the appropriate practices and protocols can be set up, including but not limited to the training of staff and changing of computer systems” he said.
A spokesperson for the Assistant Treasurer told Money Management “exemptions were always planned to be introduced by regulation to accompany the Bill before the July 1, 2008, start date. That is all that has happened with the Government’s announcement”.
NIBA is also critical of the Government’s decision to not exclude those policies with a very large premium, which it said are less than 1 per cent of policies bought in Australia.
“Such exemptions would lessen administration costs,” he said.
However, Bowen believes “the exemption balances the need for protection for Australian businesses and consumers with the acknowledged need that some insurance will not be able to be placed in Australia”.
“This legislation stems from the 2003 HIH Royal Commission … recommendation that prudential regulation be extended to all discretionary insurance-like products,” his spokesman said.
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