ASIC renews retail cover exemption for wholesale insurance contracts

ASIC said the exemption reduces compliance costs.

The Australian Securities and Investments Commission (ASIC) has extended a legislative instrument that exempts insurers and brokers from retail client obligations under the Corporations Act 2001 when retail cover is included incidentally in wholesale insurance contracts.

The ASIC Corporations (Incidental Retail Cover) Instrument 2022/716, due to expire on 16 August, has been remade for another five years. 

ASIC said the exemption reduces compliance costs and ensures they are not passed on to businesses.

‘Incidental retail cover’ refers to retail insurance that forms a minor and inseparable part of a wholesale policy, such as cover for employees’ personal effects within a business property policy. 

The exemption does not apply if the retail cover is optional or requires a separate purchase.