ASIC Corporations (Amendment) Instrument 2025/456

Explanatory Statement

ASIC Corporations (Amendment) Instrument 2025/456

This is the Explanatory Statement for ASIC Corporations (Amendment) Instrument 2025/456.

The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Summary

1.              ASIC Corporations (Amendment) Instrument 2025/456 (the amending instrument) amends the repeal date of ASIC Corporations (Incidental Retail Cover) Instrument 2022/716 (the principal instrument) from 16 August 2025 to 16 August 2030.

Purpose of the instrument

1.              The purpose of the amending instrument is to extend the operation of the principal instrument for a further 5 years.
2.              The purpose of the principal instrument is to exempt general insurers and brokers from certain retail client obligations under Chapter 7 of the Corporations Act 2001 (the Act) when a bundled general insurance contract includes incidental retail cover.  Incidental retail cover is retail insurance provided to a wholesale client which forms a minor, incidental, and inseparable part of an otherwise wholesale insurance product.
3.              The principal instrument modifies the Act such that an incidental retail cover will be deemed to be provided to a person as a wholesale client for Parts 7.6 (other than Divisions 4 and 8), 7.7, 7.8, 7.8A and 7.9.  

Consultation

1.              ASIC consulted publicly on its proposal to remake the relief in the principal instrument. On 16 May 2025, ASIC issued a news item summarising our proposal to remake the relief and seeking submissions.
2.              ASIC received one submission, which supported the proposal.

Operation of the instrument

1.              The amending instrument takes effect from the day after it is registered on the Federal Register of Legislation up to the start of 16 August 2030.

Legislative instrument and primary legislation 

1.              The subject matter and policy implemented by the amending instrument is more appropriate for a legislative instrument rather than primary legislation because the amending instrument extends the operation of the principal instrument, which is itself a legislative instrument.
2.              If the matters in the principal instrument were to be inserted into the primary legislation, they would insert into an already complex statutory framework a set of specific provisions that would apply only to a relatively small group of entities. This would result in unnecessary complexity for other users of the primary legislation.
3.          It will be a matter for the Government and for Parliament to consider whether the Corporations Act 2001 or the Corporations Regulations 2001 may need to be amended in the future to include the substance of the principal instrument in legislation.

Duration of the instrument

1.          The amending instrument extends the duration of the principal instrument up to the start of 16 August 2030. This period is appropriate to provide certainty for industry while the Government decides whether to amend the primary legislation.
2.          The amending instrument commences on the day after it is registered on the Federal Register of Legislation. It will be repealed under section 48A of the Legislation Act 2003.

Legislative authority

1.          The amending instrument is made under sections 926A(2)(c), 951B(1)(c), 992B(1)(c), 994L(2)(c) and 1020F(1)(c) of the Corporations Act 2001 (the Act), through the exercise of power as expressed in section 33(3) of the Acts Interpretation Act 2001 (the AI Act).
2.          Section 926A(2)(c) of the Act provides that ASIC may declare that Part 7.6 (other than Divisions 4 and 8) applies in relation to a person or financial product, or a class of persons or financial products, as if specified provisions were omitted, modified or varied as specified in the declaration.
3.          Section 951B(1)(c) of the Act provides that ASIC may declare that Part 7.7 applies in relation to a person or financial product, or a class of persons or financial products, as if specified provisions were omitted, modified or varied as specified in the declaration.
4.          Section 992B(1)(c) of the Act provides that ASIC may declare that Part 7.8 applies in relation to a specified class or persons or a specified class of financial products as if specified provisions were omitted, modified or varied as specified in the declaration.
5.          Section 994L(2)(c) of the Act provides that ASIC may declare that Part 7.8A applies in relation to a specified class or persons or a specified class of financial products as if specified provisions were omitted, modified or varied as specified in the declaration.
6.          Section 1020F(1)(c) of the Act provides that ASIC may declare that Part 7.9 of applies in relation to a specified class or persons or a specified class of financial products as if specified provisions were omitted, modified or varied as specified in the declaration.
7.          Section 33(3) of the AI Act provides that where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by - laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
8.          The amending instrument is a disallowable legislative instrument.

Statement of Compatibility with Human Rights 

1.          The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.

Attachment

Statement of Compatibility with Human Rights

This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.  

ASIC Corporations (Amendment) Instrument 2025/456

Overview

1. ASIC Corporations (Amendment) Instrument 2025/456 amends the date upon which the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716 will be repealed, to extend its operation for a further 5 years.

Assessment of human rights implications

2. This instrument does not engage any of the applicable rights or freedoms  

Conclusion

3. This instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.