ASIC's conditional relief enables general
insurers to provide quotes over the telephone without the need to
provide disclosure documents
Are you providing customers with insurance quotes by telephone
without first providing a product disclosure statement (PDS)? In
some cases you might be in breach of the law, according to
It is common practice for insurers and intermediaries to provide
quotes for general insurance over the telephone without first
providing a PDS. It enables customers to obtain quotes for
comparative purposes, without the delay associated with the
delivery of a PDS. It also significantly reduces the compliance
costs for insurers and makes the sales process simpler and more
However, ASIC considers that when insurers and their agents
provide full quotes to customers, and not merely indicative
estimates, they may be making offers to issue insurance. In such
cases, the Corporations Act requires the offeror to provide each
customer with a PDS at or before the time the offer is made (unless
the customer declines the offer or else requests that the insurance
be issued immediately).
To address the perceived gap between insurers' practices and
ASIC's interpretation of the Act, ASIC consulted with industry.
Exactly 12 months after starting that process, ASIC announced that
it had issued class order relief, details of which can be found
In a nutshell, the class order relief enables insurers and
intermediaries to continue their existing practice of providing
quotes over the telephone if they meet the conditions specified in
What you need to do
ASIC's relief only applies to quotes for general insurance
given over the telephone if certain conditions are met. To take
advantage of the relief, product issuers need to ask these
Is this a cold call? Did this telephone call come about because
of a cold call?
If the answer to either of these questions is 'yes' then
the relief does not apply. ASIC declined to give relief for quotes
given during, or because of, unsolicited calls.
Did the customer ask me to provide a quote?
If the customer did not specifically request a quote then the
relief is unavailable.
Before providing the quote, have I clearly informed the
the policy contains exclusions and limitations;
the PDS contains information about those exclusions and
the policy may provide a different level of cover than other
You must inform the customer of all of these things in order for
the relief to apply.
Before providing the quote, have I asked the customer whether
they want to be given the PDS? Have I made sure not to influence
Customers must be free to choose to receive the PDS when
requesting a quote. If they ask for the PDS then you must give it
to them as soon as practicable afterwards.
ASIC's relief takes effect from 28 November 2011. Before
then, you should review your existing quote processes to ensure
that they fall within the conditions specified in the class order.
If you have any doubts about whether you can satisfy those
conditions, we can assist you.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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