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This is a Bill, not an Act. For current law, see the Acts databases.
2013-2014-2015-2016
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Corporations Amendment (Life
Insurance Remuneration Arrangements)
Bill 2016
No. , 2016
(Treasury)
A Bill for an Act to amend the law in relation to
financial products that relate to insurance, and for
related purposes
No. , 2016
Corporations Amendment (Life Insurance Remuneration
Arrangements) Bill 2016
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--Amendments
3
Corporations Act 2001
3
No. , 2016
Corporations Amendment (Life Insurance Remuneration
Arrangements) Bill 2016
1
A Bill for an Act to amend the law in relation to
1
financial products that relate to insurance, and for
2
related purposes
3
The Parliament of Australia enacts:
4
1 Short title
5
This Act may be cited as the Corporations Amendment (Life
6
Insurance Remuneration Arrangements) Act 2016.
7
2 Commencement
8
(1) Each provision of this Act specified in column 1 of the table
9
commences, or is taken to have commenced, in accordance with
10
column 2 of the table. Any other statement in column 2 has effect
11
according to its terms.
12
2
Corporations Amendment (Life Insurance Remuneration
Arrangements) Bill 2016
No. , 2016
1
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. Sections 1 to 3
and anything in
this Act not
elsewhere covered
by this table
The day this Act receives the Royal Assent.
2. Schedule 1
1 July 2016.
1 July 2016
Note:
This table relates only to the provisions of this Act as originally
2
enacted. It will not be amended to deal with any later amendments of
3
this Act.
4
(2) Any information in column 3 of the table is not part of this Act.
5
Information may be inserted in this column, or information in it
6
may be edited, in any published version of this Act.
7
3 Schedules
8
Legislation that is specified in a Schedule to this Act is amended or
9
repealed as set out in the applicable items in the Schedule
10
concerned, and any other item in a Schedule to this Act has effect
11
according to its terms.
12
Amendments Schedule 1
No. , 2016
Corporations Amendment (Life Insurance Remuneration
Arrangements) Bill 2016
3
Schedule 1--Amendments
1
2
Corporations Act 2001
3
1 At the end of subsection 912C(1A)
4
Add:
5
; and (e) may require a statement containing information to be given in
6
a specified manner (including in electronic form).
7
2 Section 960
8
Insert:
9
benefit ratio, for a benefit given to a financial services licensee, or
10
a representative of a financial services licensee, in relation to a life
11
insurance product, or life insurance products, for a year, has the
12
meaning given by subsection 963B(3A).
13
policy cost, for a life risk insurance product, or life insurance
14
products, for a year has the meaning given by
15
subsections 963B(3B) and (3C).
16
3 Paragraph 963B(1)(b)
17
Repeal the paragraph, substitute:
18
(b) each of the following is satisfied in relation to the benefit:
19
(i) the benefit is given to the licensee or representative in
20
relation to a life risk insurance product or life risk
21
insurance products;
22
(ii) none of the products is a group life policy for members
23
of a superannuation entity (see subsection (2)) or a life
24
policy for a member of a default superannuation fund
25
(see subsection (3));
26
(iii) either:
27
(A) the benefit ratio for the benefit is the same for
28
the year in which the product or products are
29
issued as it is for each year in which the product
30
or products are continued; or
31
Schedule 1 Amendments
4
Corporations Amendment (Life Insurance Remuneration
Arrangements) Bill 2016
No. , 2016
(B) the benefit ratio requirements and clawback
1
requirements in section 963BA are satisfied in
2
relation to the benefit;
3
(ba) the benefit is given to the licensee or representative in
4
relation to consumer credit insurance;
5
4 After subsection 963B(3) (after the note)
6
Insert:
7
(3A) The benefit ratio for a benefit given to a financial services
8
licensee, or a representative of a financial services licensee, in
9
relation to a life insurance product, or life insurance products, for a
10
year is the ratio between:
11
(a) the benefit; and
12
(b) the policy cost payable for the product or products, or that
13
part of the policy payable for the product or products to
14
which the benefit relates, for the year.
15
(3B) The policy cost for a life risk insurance product, or products, for a
16
year is the sum of:
17
(a) the premiums payable for the product, or products, for that
18
year; and
19
(b) any fees payable for that year to the issuer of the product or
20
products for that issue; and
21
(c) any additional fees payable because the premium for the
22
product, or products, is paid periodically rather than in a
23
lump sum; and
24
(d) any other amount prescribed by the regulations for the
25
purposes of this paragraph.
26
(3C) However, the policy cost for a life risk insurance product, or
27
products, does not include any amount prescribed by the
28
regulations for the purposes of this subsection.
29
5 After section 963B
30
Insert:
31
Amendments Schedule 1
No. , 2016
Corporations Amendment (Life Insurance Remuneration
Arrangements) Bill 2016
5
963BA Benefit ratio and clawback requirements
1
Benefit ratio requirements
2
(1) The benefit ratio requirements are satisfied in relation to a benefit
3
given to a financial services licensee, or a representative of a
4
financial services licensee, in relation to a life risk insurance
5
product, or life risk insurance products, if the benefit ratio for the
6
benefit for:
7
(a) the year in which the product or products are issued; and
8
(b) each year during which the product or products are
9
continued;
10
is equal to or less than that determined by ASIC under
11
subsection (2) as an acceptable benefit ratio for that year.
12
(2) ASIC may, by legislative instrument, determine an acceptable
13
benefit ratio, or a way of working out an acceptable benefit ratio,
14
for a benefit for a year.
15
Clawback requirements
16
(3) The clawback requirements are satisfied in relation to a benefit
17
given to a financial services licensee, or a representative of a
18
financial services licensee, in relation to a life risk insurance
19
product, or life risk insurance products, if:
20
(a) the arrangement under which the benefit is payable includes
21
an obligation to repay all or part of the benefit if:
22
(i) the product, or one of the products, is cancelled or is not
23
continued, other than because a claim is made under the
24
insurance policy or because other prescribed
25
circumstances exist; or
26
(ii) the policy cost for the product, or one of the products,
27
during a year or across 2 years is reduced, other than in
28
prescribed circumstances;
29
within 2 years after it is first issued to a retail client; and
30
(b) the amount to be repaid under the obligation is equal to or
31
greater than the amount determined by ASIC under
32
subsection (4) as an acceptable repayment.
33
Schedule 1 Amendments
6
Corporations Amendment (Life Insurance Remuneration
Arrangements) Bill 2016
No. , 2016
(4) ASIC may, by legislative instrument, determine the amount, or a
1
way of working out the amount, that is an acceptable repayment for
2
the purposes of paragraph (3)(b).
3
6 After Part 10.24
4
Insert:
5
Part 10.24A--Transitional provisions relating to
6
the Corporations Amendment (Life
7
Insurance Remuneration Arrangements)
8
Act 2016
9
10
1549A Definitions
11
In this Part:
12
amending Act means the Corporations Amendment (Life Insurance
13
Remuneration Arrangements) Act 2016.
14
commencement day means the day on which Schedule 1 to the
15
amending Act commences.
16
1549B Applications of amendments relating to life risk insurance
17
products
18
(1) Subject to subsections (2), (3) and (4), the amendments made by
19
Schedule 1 to the amending Act apply to a benefit given to a
20
financial services licensee, or a representative of a financial
21
services licensee under an arrangement entered into before, on or
22
after the commencement day.
23
(2) The amendments made by Schedule 1 to the amending Act do not
24
apply to a benefit given to a financial services licensee, or a
25
representative of a financial services licensee, under an
26
arrangement entered into before the commencement day if:
27
(a) the life risk insurance product is issued before the
28
commencement day; or
29
Amendments Schedule 1
No. , 2016
Corporations Amendment (Life Insurance Remuneration
Arrangements) Bill 2016
7
(b) the application for the issue of the life risk insurance product
1
is made before the commencement day and the product is
2
issued within 3 months after the commencement day.
3
(3) The regulations may prescribe circumstances in which the
4
amendments made by Schedule 1 to the amending Act apply, or do
5
not apply, to a benefit given to a financial services licensee or a
6
representative of a financial services licensee.
7
(4) Despite subsection (1), the amendments made by Schedule 1 to the
8
amending Act do not apply to a benefit given to a financial services
9
licensee, or a representative of a financial services licensee, to the
10
extent that the operation of those amendments would result in an
11
acquisition of property (within the meaning of paragraph 51(xxxi)
12
of the Constitution) from a person otherwise than on just terms
13
(within the meaning of that paragraph of the Constitution).
14