Corporations Amendment (Life Insurance Remuneration Arrangements) Regulations 2017 (F2017L00212)
Schedule 1 Amendments
Corporations Regulations 2001
1 Before Subdivision 1 of Division 4 of Part 7.7A
Insert:
Subdivision 1 - Benefits in relation to life risk insurance products that are conflicted remuneration
7.7A.11A What this Subdivision is about
This Subdivision:
(a) is made for the purposes of section 963AA of the Act; and
(b) prescribes circumstances, in addition to those set out in section 963A, in which a benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to a life risk insurance product, or life risk insurance products, is conflicted remuneration.
7.7A.11B Circumstances in which benefits in relation to life risk insurance products are conflicted remuneration
Giving information in relation to life risk insurance products
(1) A benefit given to a financial services licensee, or a representative of a financial services licensee, is conflicted remuneration if:
(a) the benefit is given to the licensee or representative in relation to information given to a person, or persons, in relation to a life risk insurance product, or life risk insurance products; and
(b) access to the benefit, or the value of the benefit, is dependent on:
(i) the value of a life risk insurance product, or life risk insurance products, subsequently acquired by a person or persons to whom, or in relation to whom, the information is given; or
(ii) the value of a life risk insurance product, or life risk insurance products, subsequently varied that are held by a person or persons to whom, or in relation to whom, the information is given; or
(iii) the number of life risk insurance products subsequently acquired by a person or persons to whom, or in relation to whom, the information is given; or
(iv) the number of life risk insurance products subsequently varied that are held by a person or persons to whom, or in relation to whom, the information is given; and
(c) the information is not given in the course of, or as a result of, the licensee or representative, or an associate of the licensee or representative, providing financial product advice; and
(d) if the information is given in the course of providing a financial product - the information is not given in the course of providing that product to a person as a wholesale client, or to persons as wholesale clients.
Dealing in life risk insurance products
(2) A benefit given to a financial services licensee, or a representative of a financial services licensee, is conflicted remuneration if:
(a) the benefit is given to the licensee or representative in relation to a dealing in a life risk insurance product with a person as a retail client, or dealings in life risk insurance products with persons as retail clients; and
(b) access to the benefit, or the value of the benefit, is dependent on:
(i) the value of the life risk insurance product to which the dealing relates, or the life risk insurance products to which the dealings relate; or
(ii) the number of life risk insurance products to which the dealings relate; and
(c) the dealing, or dealings, do not occur in the course of, or as a result of, the licensee or representative, or an associate of the licensee or representative:
(i) providing financial product advice; or
(ii) giving information in circumstances in which the benefit would be conflicted remuneration under subregulation (1).
7.7A.11C Circumstances in which benefits in relation to information about life risk insurance products are not conflicted remuneration
Monetary benefits
(1) Despite subregulation 7.7A.11B(1), a monetary benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to information given to a person, or persons, in relation to a life risk insurance product, or life risk insurance products, is not conflicted remuneration if:
(a) because of the nature of the benefit or the circumstances in which it is given, the benefit could not reasonably be expected to influence:
(i) whether the licensee or representative gives the information to the person or persons; or
(ii) the way in which the licensee or representative presents the information in giving it to the person or persons; or
(b) none of the products is a group life policy for members of a superannuation entity (as defined in subsection 963B(2) of the Act) or a life policy for a member of a default superannuation fund (as defined in subsection 963B(3) of the Act) and either:
(i) the benefit ratio for the benefit is the same for the year in which the product or products are issued as it is for each year in which the product or products are continued; or
(ii) the benefit ratio requirements and clawback requirements in section 963BA of the Act are satisfied in relation to the benefit; or
(c) the benefit is given to the licensee or representative in relation to consumer credit insurance; or
(d) if the information is given in the course of providing a financial product to a person as a retail client or to persons as retail clients - the benefit is given by that person, or those persons; or
(e) the benefit is given to the licensee as part of the purchase or sale of all or part of the licensee's business, or to the representative as part of the purchase or sale of all or part of the representative's business.
Non-monetary benefits
(2) Despite subregulation 7.7A.11B(1), a non-monetary benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to information given to a person, or persons, in relation to a life risk insurance product, or life risk insurance products, is not conflicted remuneration if:
(a) because of the nature of the benefit or the circumstances in which it is given, the benefit could not reasonably be expected to influence:
(i) whether the licensee or representative gives the information to the person or persons; or
(ii) the way in which the licensee or representative presents the information in giving it to the person or persons; or
(b) each of the following is satisfied:
(i) the licensee or representative is the final recipient of the benefit, or all or part of the benefit passes through the licensee or representative to another financial services licensee, or representative of a financial services licensee, who is the final recipient of the benefit;
(ii) the value of the benefit in the hands of each final recipient is less than $300;
(iii) identical or similar benefits are not given on a frequent or regular basis; or
(c) each of the following is satisfied:
(i) the benefit has a genuine education or training purpose;
(ii) the benefit is relevant to giving information in relation to life risk insurance products;
(iii) if education or training is provided through an education or training course (within the meaning of regulation 7.7A.14) - subregulations 7.7A.14(3) and (4) are satisfied in relation to the education or training;
(iv) if education or training is provided other than through an education or training course - the dominant purpose of the benefit is education and training; or
(d) each of the following is satisfied:
(i) the benefit is the provision of information technology software or support;
(ii) the benefit is relevant to giving information in relation to a life risk insurance product, or life risk insurance products; or
(e) if the information is given in the course of providing a financial product to a person as a retail client or to persons as retail clients - the benefit is given by that person, or those persons.
7.7A.11D Circumstances in which benefits in relation to dealings in life risk insurance products are not conflicted remuneration
Monetary benefits
(1) Despite subregulation 7.7A.11B(2), a monetary benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to a dealing in a life risk insurance product with a person as a retail client, or dealings in life risk insurance products with persons as retail clients, is not conflicted remuneration if:
(a) because of the nature of the benefit or the circumstances in which it is given, the benefit could not reasonably be expected to influence:
(i) whether the licensee or representative deals in the life risk insurance product, or life risk insurance products; or
(ii) the way in which the licensee or representative deals in the life risk insurance product, or life risk insurance products; or
(b) none of the products is a group life policy for members of a superannuation entity (as defined in subsection 963B(2) of the Act) or a life policy for a member of a default superannuation fund (as defined in subsection 963B(3) of the Act) and either:
(i) the benefit ratio for the benefit is the same for the year in which the product or products are issued as it is for each year in which the product or products are continued; or
(ii) the benefit ratio requirements and clawback requirements in section 963BA of the Act are satisfied in relation to the benefit; or
(c) the benefit is given to the licensee or representative in relation to consumer credit insurance; or
(d) the benefit is given to the licensee or representative by the retail client, or retail clients; or
(e) the benefit is paid to the licensee as part of the purchase or sale of all or part of the licensee's business, or to the representative as part of the purchase or sale of all or part of the representative's business.
Non-monetary benefits
(2) Despite subregulation 7.7A.11B(2), a non-monetary benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to a dealing in a life risk insurance product with a person as a retail client, or dealings in life risk insurance products with persons as retail clients, is not conflicted remuneration if:
(a) because of the nature of the benefit or the circumstances in which it is given, the benefit could not reasonably be expected to influence:
(i) whether the licensee or representative deals in the life risk insurance product, or life risk insurance products; or
(ii) the way in which the licensee or representative deals in the life risk insurance product, or life risk insurance products; or
(b) each of the following is satisfied:
(i) the licensee or representative is the final recipient of the benefit, or all or part of the benefit passes through the licensee or representative to another financial services licensee, or representative of a financial services licensee, who is the final recipient of the benefit;
(ii) the value of the benefit in the hands of each final recipient is less than $300;
(iii) identical or similar benefits are not given on a frequent or regular basis; or
(c) each of the following is satisfied:
(i) the benefit has a genuine education or training purpose;
(ii) the benefit is relevant to dealing in life risk insurance products;
(iii) if the education or training is provided through an education or training course (within the meaning of regulation 7.7A.14) - subregulations 7.7A.14(3) and (4) are satisfied in relation to the education or training;
(iv) if the education or training is provided other than through an education or training course - the dominant purpose of the benefit is education and training; or
(d) each of the following is satisfied:
(i) the benefit is the provision of information technology software or support;
(ii) the benefit is relevant to dealing in life risk insurance products; or
(e) the benefit is given to the licensee or representative by the retail client, or retail clients.