ASIC Corporations (Amendment) Instrument 2025/456

Administered by Department of the Treasury

Legislation au F2025L00891 Not in force Legislative Instrument

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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.

 

Overview

The ASIC Corporations (Amendment) Instrument 2025/456, enacted by the Australian Securities and Investments Commission (ASIC), seeks to address a specific gap in the regulatory framework concerning incidental retail cover in bundled general insurance contracts. This legislative instrument extends the repeal date of the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716 from 16 August 2025 to 16 August 2030. The primary aim of the principal instrument was to exempt general insurers and brokers from certain retail client obligations under the Corporations Act 2001 when such contracts include incidental retail cover. This extension provides continued regulatory certainty for the industry while allowing time for potential future legislative amendments by the Government and Parliament. The decision to use a legislative instrument rather than primary legislation was based on the need to avoid unnecessary complexity in the Corporations Act 2001 and the Corporations Regulations 2001.

Scope and Application

The ASIC Corporations (Amendment) Instrument 2025/456 amends the repeal date of the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716 from 16 August 2025 to 16 August 2030. This amendment extends the operation of the principal instrument, which exempts general insurers and brokers from certain retail client obligations under Chapter 7 of the Corporations Act 2001 when a bundled general insurance contract includes incidental retail cover. Incidental retail cover refers to retail insurance provided to a wholesale client as a minor, incidental, and inseparable part of a wholesale insurance product. The principal instrument modifies the Act to deem that incidental retail cover is provided to a person as a wholesale client for Parts 7.6 (excluding Divisions 4 and 8), 7.7, 7.8, 7.8A, and 7.9. The amending instrument takes effect from the day after it is registered on the Federal Register of Legislation and will be repealed under section 48A of the Legislation Act 2003. It 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, through the exercise of power as expressed in section 33(3) of the Acts Interpretation Act 2001. The instrument is a disallowable legislative instrument and includes a Statement of Compatibility with Human Rights as required by the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The ASIC Corporations (Amendment) Instrument 2025/456 amends the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716, extending its repeal date from 16 August 2025 to 16 August 2030 (section 2). This amendment ensures that the exemption of general insurers and brokers from certain retail client obligations under Chapter 7 of the Corporations Act 2001 (the Act) continues for bundled general insurance contracts that include incidental retail cover, such as retail insurance provided to a wholesale client as a minor, incidental, and inseparable part of a wholesale insurance product (section 2). The purpose of this amendment is to provide certainty to the industry while the Government considers future legislative changes (section 2). The amending instrument becomes effective the day after it is registered on the Federal Register of Legislation and will be repealed under section 48A of the Legislation Act 2003 (section 3). The amending instrument imposes obligations on general insurers and brokers to adhere to the modified retail client obligations under Parts 7.6, 7.7, 7.8, 7.8A, and 7.9 of the Act, as specified by the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716 (section 2). These entities must ensure compliance with the exemptions provided for incidental retail cover, maintaining the distinction between retail and wholesale insurance products within their bundled contracts. This requires adherence to the specific conditions set forth in the principal instrument, ensuring that the incidental retail cover is appropriately classified and treated as wholesale insurance (section 2). Breaches of the provisions set out in the ASIC Corporations (Amendment) Instrument 2025/456 could lead to civil or criminal consequences, depending on the nature and severity of the breach. The penalties for non-compliance with the Corporations Act 2001 can include substantial fines and, in severe cases, imprisonment. Specifically, under section 1317E of the Act, individuals who engage in conduct that contravenes the Act may be liable for penalties of up to $210,000 for corporations and up to $42,000 for individuals, along with potential imprisonment terms. The exact penalties would be determined based on the specific breach and the court’s discretion (section 2).

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Corporate Law & Governance
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Legislative Instrument
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Commencement Provisions
Repeal & Amendment
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.