300000000 QBE Capital Funding LP - Irish Stock Exchange

insurance contracts and provides for appropriate disclosure of information by insurers and policyholders. It also
provides rules covering a wide variety of things such as cancellation of insurance, fraudulent claims and
misrepresentation.
On September 10, 2003, the Federal government announced a review of the Insurance Contracts Act
1984 (Cth). The stated objective of the review was to seek recommendations aimed at improving the overall
operation of the Act by correcting deficiencies and clarifying ambiguities in its operation. The review was
conducted in two parts, the first dealt with section 54 regarding late notification of claims and the second with the
remainder of the Act. The review panel provided to the government its report on section 54 on October 31, 2003
and its report regarding the remainder of the Act on June 30, 2004. An exposure draft bill relating to the section
54 recommendations was released for consultation on March 8, 2004. Following that consultation process, the
government intends to prepare a new draft bill to address all of the review panel’s key recommendations. That
draft bill has not yet been released for public comment. The government has given no further indication as to
when that draft will be released.
The Corporations Act 2001 (Cth)
In addition to the existing disclosure requirements under the Insurance Contracts Act 1984 (Cth), the
Financial Services Reform Act 2001 (Cth) (“FSR Act”) introduced disclosure rules into the Corporations Act
which apply to financial products (including insurance). The FSR Act amendments to the Corporations Act came
into full effect on March 11, 2004.
The FSR Act regime aims to provide a uniform regulatory framework for the licensing and conduct of
all providers of financial services. It applies to general insurance products, as general insurance products fall
within the definition of financial products which forms the basis of the regulatory framework.
For the general insurance industry, the requirement to provide a Product Disclosure Statement (“PDS”)
represents a significant change from previous practice. Amongst other things, the PDS must set out the cost and
benefits of the insurance product, any risks associated with it, its significant characteristics such as exclusions
and the statutory cooling-off period. A PDS must be provided when a licensee first offers or recommends
insurance products to certain persons. Other disclosure requirements are also imposed, including the provision of
financial services guides and statements of advice.
The Corporations Act also contains licensing requirements which apply to certain insurance agents,
brokers and other intermediaries which are in the business of providing a financial service. This includes
businesses that do any of the following things:
• Provide financial product advice. This category includes insurers or intermediaries who make
recommendations or statements of opinion that are intended to influence a prospective insured’s
decision in relation to a particular insurance product. It also includes recommendations or statements
that could reasonably be regarded as having such an influence.
• Deal in a financial product. This category includes insurers and agents who issue insurance and also
intermediaries who arrange for a person to acquire insurance.
Providers of services who do not obtain a license can be authorized by a licensee to provide such
services on the licensee’s behalf. However where they are so appointed by a licensee that licensee becomes,
subject to a few exceptions, liable for the actions of the intermediary.
There are a number of exemptions which apply to the license requirement. For example:
• an insurer licensed by APRA will not need an Australian financial services license to provide a
service in relation to which APRA has regulatory or supervisory responsibility and which is provided
only to wholesale clients; and
128