Claims handling and settling: How to comply with your AFS licence obligations

This is Information Sheet 253 (INFO 253). It is for anyone who provides claims handling and settling services for insurance products regulated by ASIC.

These services were previously excluded from the definition of ‘financial service’ in the Corporations Act 2001 and persons who provided these services were not required to hold an Australian financial services (AFS) licence. This exclusion has now been removed.

This information sheet explains:

• what is a ‘claims handling and settling service’
• how the AFS licensing regime applies to these services from 1 January 2022
• when an AFS licence or variation for claims handling and settling is needed
• who can handle and settle claims on behalf of an AFS licensee
• what are the obligations of an AFS licensee and how these obligations apply to claims handling and settling, and
• when and how to apply for an AFS licence or variation, including transitional arrangements, and how we will assess applications.

It also includes some examples of how the AFS licensing regime may apply to claims handling and settling in various circumstances.

If you are applying for an AFS licence or variation, this information sheet will help you understand what you must demonstrate in your application.

Note: On 15 April 2021, the Government made regulations that exclude certain people from being ‘claimant intermediaries’: see Financial Sector Reform (Hayne Royal Commission Response) (Claimant Intermediaries) Regulations 2021. ASIC updated INFO 253 to reflect these changes to the law.

Download

INFO 253 Claims handling and settling: How to comply with your AFS licence obligations (PDF 386 KB)

Important notice

Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. We encourage you to seek your own professional advice to find out how the applicable laws apply to you, as it is your responsibility to determine your obligations.

You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases, your particular circumstances must be taken into account when determining how the law applies to you.