Financial Sector Reform (Hayne Royal Commission Response) (2021 Measures No. 1) Regulations 2021 (F2021L00127)

Schedule 2   Claims handling and settling services

Corporations Regulations 2001

3   Before regulation 7.1.08

Insert:

7.1.08AA Meaning of financial product advice - advice that is not regarded as a necessary part of providing claims handling and settling services

Advice about how to structure or use insurance claim payouts

(1) For the purposes of paragraph 766B(7B)(b) of the Act, giving a recommendation or statement of opinion, or a report of either of those things, cannot reasonably be regarded as a necessary part of providing a claims handling and settling service if the recommendation, statement or report relates to:

(a) how an amount to be paid to a person in settlement of a claim under an insurance product should be structured; or

(b) the management or use of an amount paid, or to be paid, to a person in settlement of a claim under an insurance product.

Advice about other insurance products or financial products

(2) For the purposes of paragraph 766B(7B)(b) of the Act, giving a recommendation or statement of opinion, or a report of either of those things, cannot reasonably be regarded as a necessary part of providing a claims handling and settling service if the recommendation, statement or report:

(a) is given in response to a claim, or potential claim, made under an insurance product; and

(b) relates to other insurance products not held by the person making the claim or financial products.