Replacement Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Josh Frydenberg MP)Chapter 4 Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Implementing Recommendation 4.7 of the Financial Services Royal Commission
4.1 Schedule 1 to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .
Overview
4.2 Schedule 1 to the Bill extends unfair contract terms regime in the Australian Securities and Investments Commission Act 2001 to apply to insurance contracts under the Insurance Contracts Act 1984 .
Human rights implications
4.3 Schedule 1 to the Bill does not engage any of the applicable rights or freedoms.
Conclusion
4.4 Schedule 1 to the Bill is compatible with human rights as it does not raise any human rights issues.
Implementing Recommendation 4.2 of the Financial Services Royal Commission
4.5 Schedule 2 to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .
Overview
4.6 Schedule 2 to the Bill gives effect to recommendation 4.2 of the Financial Services Royal Commission to ensure that the consumer protection provisions of the Australian Securities and Investments Commission Act 2001 apply to funeral expenses policies.
Human rights implications
4.7 Schedule 2 to the Bill does not engage any of the applicable rights or freedoms.
Conclusion
4.8 Schedule 2 to the Bill is compatible with human rights as it does not raise any human rights issues.
Mortgage brokers
4.9 Schedule 3 to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .
Overview
4.10 Schedule 3 to the Bill amends the Credit Act to require mortgage brokers to act in the best interests of consumers and to address conflicted remuneration for mortgage brokers and mortgage intermediaries such as aggregators. These new laws improve consumer outcomes by requiring brokers to act in the best interests of their clients and by reducing the potential for conflicts of interests to arise which may impact the advice consumers receive from brokers.
4.11 The key features of the new law are:
- •
- mortgage brokers must act in the best interests of consumers in relation to credit assistance in relation to credit contracts;
- •
- where there is a conflict of interest, mortgage brokers must give priority to consumers in providing credit assistance in relation to credit contracts;
- •
- mortgage brokers and mortgage intermediaries must not accept conflicted remuneration;
- •
- employers, credit providers and mortgage intermediaries must not give conflicted remuneration to mortgage brokers or mortgage intermediaries; and
- •
- the circumstances in which these bans on conflicted remuneration apply are to be set out in the regulations.
Human rights implications
4.12 Schedule 3 to the Bill does not engage any of the applicable rights or freedoms.
Conclusion
4.13 Schedule 3 to the Bill is compatible with human rights as it does not raise any human rights issues.