Regulatory & Legal
Comprehensive definitions of Australian insurance regulatory bodies, legal frameworks, and consumer protection mechanisms
20 terms in this category
ASIC (Australian Securities and Investments Commission)
ASIC is Australia's corporate, markets, and financial services regulator that oversees insurance companies, financial advisers, and ensures compliance with consumer protection laws.
APRA (Australian Prudential Regulation Authority)
APRA is the prudential regulator of Australian deposit-taking institutions, insurance companies, and superannuation funds, ensuring they remain financially sound and can meet obligations to policyholders.
AFCA (Australian Financial Complaints Authority)
AFCA is the independent external dispute resolution scheme that resolves complaints between consumers and financial firms, including insurance disputes, providing fair and binding determinations.
Financial Services Guide (FSG)
An FSG is a mandatory document that financial advisers and insurance brokers must provide, explaining their services, fees, potential conflicts of interest, and how they are remunerated.
Product Disclosure Statement (PDS)
A PDS is a mandatory legal document that insurers must provide to consumers, containing essential information about an insurance policy's features, benefits, risks, costs, and terms and conditions.
Target Market Determination (TMD)
A TMD is a public document that describes the class of consumers a financial product is designed for, ensuring products are distributed to appropriate customers under design and distribution obligations.
Financial Accountability Regime (FAR)
FAR is a regulatory framework that holds senior executives and directors of financial institutions, including insurers, accountable for their conduct and responsibilities through registration and accountability obligations.
Duty to Take Reasonable Care
This duty, introduced in 2021, requires consumers to take reasonable care not to make misrepresentations to insurers when applying for insurance or making claims, replacing the previous duty of disclosure.
Duty of Disclosure
The previous consumer obligation requiring policyholders to disclose all relevant matters to insurers, now largely replaced by the duty to take reasonable care for consumer insurance contracts.
Non-disclosure
Non-disclosure occurs when a policyholder fails to inform the insurer of material information during the application process or when updating their policy, potentially affecting coverage.
Misrepresentation
Misrepresentation occurs when a policyholder provides false or misleading information to an insurer, whether intentionally or unintentionally, that could influence the insurer's decision on coverage or terms.
Policy Void
A void policy is treated as if it never existed, typically occurring when an insurer cancels coverage from inception due to fraudulent misrepresentation, reckless non-disclosure, or material breach of policy terms.
Cooling-off Rights
Cooling-off rights give consumers a statutory period, typically 14-30 days, to cancel a new insurance policy and receive a full premium refund without needing to provide a reason.
Internal Dispute Resolution (IDR)
IDR is the mandatory process insurers must have for handling customer complaints internally, requiring acknowledgment within 24 hours and resolution within 30 days for most complaints.
External Dispute Resolution (EDR)
EDR refers to independent dispute resolution services, particularly AFCA, that resolve complaints between consumers and financial firms when internal processes fail to achieve satisfactory outcomes.
Life Insurance Code of Practice
The Life Insurance Code of Practice is a voluntary industry code that sets higher standards than legal minimums for how life insurers should treat customers, handle claims, and conduct business.
Retail Client
A retail client is an individual or small business receiving financial services who gets the highest level of consumer protections, including PDSs, cooling-off rights, and access to AFCA.
Wholesale Client
A wholesale client is a sophisticated investor or large business that receives reduced consumer protections under the assumption they have greater financial knowledge and resources to assess products independently.
Financial Adviser
A financial adviser is a licensed professional who provides personal financial advice, including insurance recommendations, and must hold an Australian Financial Services License or be an authorized representative.
General Insurance Code of Practice
The General Insurance Code of Practice is a voluntary industry code that sets service standards for insurers offering home, motor, travel, and other general insurance products, focusing on customer service and claims handling.