Corporations Amendment Regulations 2008 (No. 3) (130 of 2008)
Schedule 1 Amendments
[1] After regulation 7.7.20
insert
7.7.20A Extension of disclosure requirements to wholesale clients dealing with certain unauthorised insurers
(1) For paragraph 949B (1) (e) of the Act, a person must give a wholesale client the information set out in subregulation (3) for a financial service provided by that person to the wholesale client if:
(a) the service relates to an insurance contract specified in regulation 4C or 4D of the Insurance Regulations 2002 that may be offered or issued by an unauthorised foreign insurer (within the meaning of those Regulations) (the insurer ); and
(b) either:
(i) the person would be required to give a Statement of Advice if the service were provided to a retail client; or
(ii) the contract is offered or issued to the wholesale client.
Note Failure to comply with this subregulation is an offence punishable by a fine of up to 50 penalty units or imprisonment for 1 year, or both - see section 1311 and item 272A of Schedule 3 to the Corporations Act 2001.
(2) For paragraph 949B (1) (e) of the Act, a person must give a wholesale client the information set out in subregulation (3) for a financial service provided by that person to the wholesale client if:
(a) the service relates to the wholesale client dealing with an entity (the insurer ) specified in regulation 12 of the Insurance Regulations 2002; and
(b) either:
(i) the person would be required to give a Statement of Advice if the service were provided to a retail client; or
(ii) the insurer offers or issues a financial product to the wholesale client.
Note Failure to comply with this subregulation is an offence punishable by a fine of up to 50 penalty units or imprisonment for 1 year, or both - see section 1311 and item 272A of Schedule 3 to the Corporations Act 2001.
(3) The information is:
(a) a statement that the insurer is not authorised under the Insurance Act 1973 to conduct insurance business in Australia; and
(b) a statement that the insurer is not subject to the provisions of the Insurance Act 1973, which establishes a system of financial supervision of general insurers in Australia; and
(c) a statement that the wholesale client should consider whether to obtain further information, including:
(i) the country in which the insurer is incorporated, and whether the country has a system of financial supervision of insurers; and
(ii) the paid up capital of the insurer; and
(iii) which country's laws will determine disputes in relation to the financial product.