The Australian Competition and Consumer Commission (ACCC) has authorised Suncorp, QBE and Allianz to proceed to work together along with insurance brokers on a package of proposals for insurers to offer deferred payments, refunds under small business relief package.
ACCC Chair Rod Sims said, “We have received a number of urgent formal requests for authorisations from many sectors of the Australian economy. The ACCC stands ready to grant interim authorisations quickly when they are in the public interest.”
“Many small and medium-size Australian businesses are experiencing unprecedented financial hardship due to the COVID-19 pandemic, but need to maintain essential insurance protections, in some cases in order to be able to continue to operate. There is a clear and urgent need for these measures.”
The National Insurance Brokers Association (NIBA) CEO, Dallas Booth explained, “The ACCC authorisation requires insurance brokers to notify the ACCC in advance if they wish to participate in the program announced by the three insurance companies.”
“There are a number of aspects of the ACCC authorisation, and the insurer proposal, that will need to be clarified. Most importantly, need for insurance brokers to notify the ACCC before participating in the program needs to be clarified. NIBA is making inquiries about how this is intended to occur and what procedures will need to be followed.”
The package allows the deferral of premiums for up to six months, cancellation of policies without charge and refunds of unused portions of travel insurance policies. The package is available to small businesses that ‘opt in’to the offer, and is available for a range of insurance policies renewed up to 30 June 2020. A small business is one with fewer than 20 employees and turnover of less than $10 million.
Booth has advised that NIBA has spoken with the ACCC in relation to the obligation on insurance brokers to notify the commission of their intention to discuss the proposals with insurance companies and with clients, and to gain the benefit of the ACCC authorisation while doing so.
The ACCC has advised that in order to gain the benefit of the authorisation, insurance brokers must send a short email to the ACCC at firstname.lastname@example.org.
Please add the following to your email:
Reference: Interim Authorisation AA1000485 Suncorp Group Limited and others.
The email should state the name of the firm (the name should ideally be the AFS licence holder), and give a short (two – three sentence) description of the broking firm and the nature of clients the firm advises and supports. Details of individual clients are not needed.
AFS licence holders who have authorised representatives should make it clear the notice to the ACCC is on behalf of the AFS licence holder and all authorised representatives of the licence holder.
Booth has reminded brokers to keep a secure copy of the notification to the ACCC.
He said, “Nothing further is required at this point in time. It will be sufficient if the broking firm has given the notification to the ACCC in the form I have described.”
“In due course, the ACCC may publish the names of insurance broking firms who have given a notification in order to be able to discuss the proposals with their clients in accordance with the ACCC authorisation.”
Booth has also reminded intermediaries that this notification must be given to the ACCC before the Suncorp/QBE/Allianz proposals are discussed with the insurers or with clients. He said, “I strongly urge all member principals to give the notice to the ACCC as soon as possible.”
Insurance intermediaries can find the Interim Authorisation on the NIBA website here.