New ASIC Regulatory Guide explained

The Australian Securities and Investment Commission (ASIC) has recently issued a new Regulatory Guide in relation to the handling of complaints and disputes within financial services providers.

National Insurance Brokers Association (NIBA) CEO, Dallas Booth said, “Insurance broking firms should have internal dispute resolution (IDR) policies and procedures in place already – this is a requirement of your Australian Financial Services Licence. The new Regulatory Guide (ASIC RG 271) updates and enhances the ASIC requirements and expectations.”

Given the impact of COVID-19, ASIC has given the industry a transition period. The standards, requirements and guidance in the new Regulatory Guide only apply to complaints received on or after 5 October 2021. For complaints received by firms before 5 October 2021, Regulatory Guide 165 Licensing: Internal and external dispute resolution (RG 165) applies (which will be withdrawn on 5 October 2022).

NIBA’s legal adviser Mark Radford has prepared an overview of the new IDR requirements and Booth has urged insurance intermediaries to consider this note very carefully.

Action required

It is important that all insurance broking firms commence a review of their internal processes and procedures for handling complaints and disputes within the firm, in order to ensure the firm complies with the new obligations from 5 October 2021. Please note a number of the new obligations are mandatory, and must be implemented within broking firms.

More information, including the full Regulatory Guide 271, is available here.