Licensed advisers as well as authorised representatives and staff members working under Australian Financial Services Licenses (AFSLs) need to be granted exemptions under the new insurance claims handling regime, according to the Association of Financial Advisers (AFA).
In a submission to the Treasury dealing with Regulation of Claimant Intermediaries, the AFA expressed concern that the legislation as currently drafted appeared to confer an exemption only on those who hold an AFSL.
“We recommend that the exemption be extended to any financial adviser or employee of a financial advice practice which is authorised to provide financial advice on life insurance products,” the AFA submission said.
“It is our view that this would provide sufficient protection for clients, and not unreasonably restrict access to advice and support in the claims process.”
The submission noted that lawyers are fully exempt from the legislation with the exemption applying to all lawyers, “no matter whether they are an insurance specialist or not”.
“Financial advisers, and particularly risk specialists, have a high level of knowledge on life insurance products, terms and conditions, and the claims process, and should have access to a similar broad exemption,” it said.
“In order to ensure that financial advisers can continue to provide claims handling services without the need to incur significant expenses to vary their licence, we think that the exemption needs to cover the following:
- All financial advisers, including those who are self-licensed, authorised representatives or representatives of a licensee. It also needs to take into account the issues with respect to corporate authorised representatives;
- The staff of an advice practice, where there is an authorisation to provide life insurance advice;
- All clients who are registered under the adviser’s practice; and
- New clients who have not yet received personal advice, where they have approached or been introduced to the adviser for support and guidance in the claims process.