The Coalition Government has released consultation draft regulations and legislation to remove the Corporations Act exemption for funeral expenses policies to be treated the same as other financial products.
The regulations would aim to improve consumer outcomes by requiring providers of funeral expenses policies to hold an Australian Financial Services Licence (AFSL) and be fully regulated by the Australian Securities and Investments Commission (ASIC).
The government said the removal of this exemption would ensure consumers had appropriate protections when taking out funeral expense policies to help fund the costs associated with a funeral.
The Government was acting on evidence from Commissioner Hayne that many indigenous people living in regional and remote communities were being misled and pressured into funeral expense policies.
Providers of funeral bonds who operated under the exemption would also be required to hold an ASFL licence.
The regulations would not require funeral directors to hold a licence when distributing a funeral bond in conjunction with the arrangement of a prepaid funeral, cremation or burial service.