Life insurance inside superannuation – including group insurance – will be exempt from the deferred sales model and anti-hawking regime.
The regime was due to commence on 5 October, 2021, and the intention of the deferred sales model for add-on insurance introduced a four-day pause between the sale of a primary product and the sale of an add-on insurance product, to help individual customers make informed decisions when purchasing insurance.
The Federal Treasurer, Josh Frydenberg, said: “Consistent with recommendation 4.3 of the Financial Services Royal Commission, on 10 December, 2020, the Government passed laws that introduced a deferred sales model for add on insurance.
“The legislation provided for regulations to exempt a class of add-on insurance products where it would not be appropriate that they be captured by the deferred sales model.”
Andrew Hall, Insurance Council of Australia chief executive, said the announcement showed the Government listened to the concerns of the industry and applied appropriate exemptions, so consumers could get immediate insurance cover to protect their valuable purchases.
“Importantly for insurers the Government’s decision means the industry has certainty about the implementation of the deferred sales model and can continue to provide valuable support to the economy through the challenges of COVID-19,” Hall said.
“The industry continues to be focused on ensuring that we are fully prepared for the commencement of the new legislation, and we look forward to working with the Government on the remaining recommendations of the Hayne Royal Commission.”
The Government would also exempt from the deferred sales model the following classes of insurance products:
- Compulsory third party (CTP) insurance for motor vehicles; third party property damage, fire and theft insurance for motor vehicles;
- Comprehensive insurance for boats, motorcycles, motorhomes, caravans, and trucks;
- Postage and delivery of consumer goods insurance;
- Home building insurance;
- Home and contents insurance; and
- Landlord insurance.