Corporations Act 2001
Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .
View history note
Hide history noteBenefit ratio requirements
963BA(1)
The benefit ratio requirements are satisfied in relation to 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, if the benefit ratio for the benefit for: (a) the year in which the product or products are issued; and (b) each year during which the product or products are continued;
is equal to or less than that determined by ASIC under subsection (2) as an acceptable benefit ratio for that year.
963BA(2)
ASIC may, by legislative instrument, determine an acceptable benefit ratio, or a way of working out an acceptable benefit ratio, for a benefit for a year.
Clawback requirements
963BA(3)
The clawback requirements are satisfied in relation to 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, if: (a) the arrangement under which the benefit is payable includes an obligation to repay all or part of the benefit if:
(i) the product, or one of the products, is cancelled or is not continued, other than because a claim is made under the insurance policy or because other prescribed circumstances exist; or
(ii) the policy cost for the product, or one of the products, during a year or across 2 years is reduced, other than in prescribed circumstances;
within 2 years after the product is first issued to a retail client; and
(b) the amount to be repaid under the obligation is equal to or greater than the amount determined by ASIC under subsection (4) as an acceptable repayment.963BA(4)
ASIC may, by legislative instrument, determine the amount, or a way of working out the amount, that is an acceptable repayment for the purposes of paragraph (3)(b) .
[
CCH Note:
S 963BB will be inserted by No 67 of 2024, s 3, Sch 1[96] (effective 9 July 2025). S 963BB will read:
then the consent has effect as varied for the purposes of this section.]
SECTION 963BB INFORMED CONSENT FOR CERTAIN INSURANCE COMMISSIONS
963BB(1)
If a financial services licensee or a representative of a financial services licensee provides, or is likely to provide, personal advice to a retail client in relation to a financial product (the
relevant product
) that is a general insurance product, a life risk insurance product, or consumer credit insurance, paragraphs
963B(1)(a)
,
(b)
and
(ba)
do not apply to a monetary benefit given in connection with the issue or sale of the relevant product to the client unless:
(b)
before the issue or sale of the relevant product, the client consented to the monetary benefit being given; and
(c)
before the consent was given, the following information was disclosed to the client:
(i)
the name of the insurer under the relevant product (if known);
(ii)
for a general insurance product
-
the rate of the monetary benefit, expressed as a percentage range of the policy cost for the product;
(iii)
for a life risk insurance product or consumer credit insurance
-
the rate of the monetary benefit, expressed as a percentage of the policy cost payable for the product;
(iv)
if more than one monetary benefit will be given in connection with the issue or sale of the relevant product
-
the frequency of giving those monetary benefits and the period over which monetary benefits covered by the consent could be given, including any renewals; and
(v)
the nature of any services that the financial services licensee or representative will provide the client (if any) in relation to the relevant product; and
(vi)
a statement that it is a requirement of the law that client consent must be obtained before the payment of an insurance commission;
(vii)
the fact that the consent is irrevocable; and
(d)
the licensee or representative has:
(i)
the client
'
s written consent or a copy of the client
'
s written consent; or
(ii)
if the consent was not obtained in writing
-
a written record of the client
'
s consent; and
(e)
the licensee or representative gives a copy of the written consent, or a copy of the record of the consent, to the client as soon as reasonably practicable after the consent is obtained.
963BB(2)
To avoid doubt:
(a)
if information meeting the requirements of paragraph
(1)(c)
has already been disclosed to the client, that paragraph does not require the information to be disclosed again; and
(b)
a consent to a particular rate or frequency of a monetary benefit given for the purposes of subsection
(1)
is taken to also be a consent to a rate or frequency that is less than that disclosed to the client before that consent was given, as mentioned in subparagraph
(1)(c)(ii)
,
(iii)
or
(iv)
.
Renewals of general insurance products
963BB(3)
For the purposes of subsection
(1)
, a consent (the
original consent
) to a monetary benefit given in connection with the issue or sale to a retail client of a general insurance product is taken to also be a consent to a monetary benefit (a
renewal benefit
) being given in connection with a renewal of that product if:
(a)
the information disclosed to the client before the original consent was given included the fact that the original consent would cover renewals of the general insurance product; and
(b)
the rate of the renewal benefit is equal to or less than that disclosed to the client before the original consent was given, as mentioned in subparagraph
(1)(c)(ii)
.
Transfer of financial product advice business
963BB(4)
For the purposes of subsection
(1)
, a consent to a monetary benefit being given to a financial services licensee (the
original recipient
) or a representative of a financial services licensee (also the
original recipient
) is taken to also be a consent to the monetary benefit being given to another person (the
new recipient
) if:
(a)
the original recipient
'
s financial product advice business is wholly or partly sold or transferred to:
(i)
another financial services licensee; or
(ii)
a representative of another financial services licensee; or
(iii)
another representative of the financial services licensee that is the original recipient; and
(b)
the new recipient is:
(i)
if subparagraph
(a)(i)
applies
-
that other licensee; or
(ii)
if subparagraph
(a)(ii)
applies
-
that representative of another licensee; or
(iii)
if subparagraph
(a)(iii)
applies
-
that other representative of the licensee that is the original recipient.
Variation of consent
963BB(5)
If a client has given a consent for the purposes of subsection
(1)
, the financial services licensee or representative may:
(a)
disclose to the client proposed variations to one or more of the matters mentioned in subparagraphs
(1)(c)(i)
to
(v)
; and
(b)
request the client to consent to those variations.
963BB(6)
If:
(a)
the client consents to those variations; and
(b)
paragraphs
(1)(d)
and
(e)
are satisfied in relation to that variation;
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