Explanatory Statement
ASIC Corporations (Strata Title Co-Insurance) Instrument 2026/156
This is the Explanatory Statement for ASIC Corporations (Strata Title Co-Insurance) Instrument 2026/156
The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).
Summary
1. ASIC Corporations (Strata Title Co-Insurance) Instrument 2026/156 (the Instrument) modifies disclosure rules in Part 7.9 of the Corporations Act 2001 (Act) so that only one insurer is required to prepare a Product Disclosure Statement (PDS) for a home building insurance product that is jointly issued by more than one insurer under a strata title co-insurance arrangement.
2. The Instrument requires only one of the insurers (the lead issuer) to prepare the PDS for the retail client. The lead issuer will also be required to prepare a supplementary PDS that contains the name and contact details of each following issuer and the participating share of the lead issuer and each following issuer under the strata title co-insurance arrangement.
Purpose of the instrument
3. The purpose of the Instrument is to resolve a legal inconsistency that makes strict compliance impossible or disproportionately burdensome for following issuers in co-insurance arrangements for strata title properties.
4. Subsection 1013A(1) of the Act requires insurers to prepare a PDS if a PDS is required by sections 1012A, 1012B, 1012H or 1012I. This means that each insurer in a co-insurance arrangement must prepare a PDS. In practice, the bespoke nature of co-insurance arrangements and time constraints make it impractical to jointly prepare a PDS.
5. The Instrument facilitates market participation and competition in the strata insurance sector. It also supports consumer protection by ensuring that all relevant information is still disclosed to Owners’ Corporations who are retail clients while avoiding confusion resulting from receiving multiple PDSs.
Consultation
6. ASIC sought feedback from a number of consumer representatives, industry groups and experts, and received five substantive submissions. Four were supportive of the proposal to grant relief, with the fifth not expressing a view. Several submissions noted the regulatory complexity involved with strata insurance.
Operation of the instrument
7. Section 4 of the Instrument provides a simplified outline for the Instrument. Its purpose is to assist readers in understanding the substantive provisions. However, the outline is not intended to be comprehensive, and readers should rely on the substantive provisions when considering the Instrument’s effect.
8. Section 6 of the Instrument modifies section 1013A of the Act to provide that the PDS for jointly issued co-insurance may be prepared by only one issuer of the policy. If only one person has prepared the PDS, then that is the responsible person for the PDS.
9. Section 7 of the Instrument provides that the declaration in section 6 applies to strata title co-insurance arrangements where the lead issuer of the home building insurance product issued under the arrangement has prepared a PDS that contains the terms of the strata title co-insurance arrangement other than the name and contact details of the following issuers and participating share of the lead issuer and each following issuer. The lead issuer must also prepare a Supplementary PDS that contains these details, to be provided in accordance with the ordinary application of Part 7.9 Division 2 Subdivision B.
Legislative instrument and primary legislation
11. The subject matter and policy implemented by this instrument is more appropriate for a legislative instrument rather than primary legislation because it provides relief where strict compliance with the primary legislation produces anomalous outcomes that would be inconsistent with the intent of the primary law.
12. If the matters in the 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 additional cost and unnecessary complexity for other users of the primary legislation.
13. It will be a matter for the Government and for Parliament to consider whether the primary legislation may need to be amended in the future to include the substance of the relief in the Instrument in legislation.
Duration of the instrument
14. The duration of the Instrument is 5 years.
Legislative authority
15. This Instrument is made under paragraph 1020F(1)(c) of the Act.
16. The Instrument is a disallowable legislative instrument.
Statement of Compatibility with Human Rights
17. 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 (Strata Title Co-Insurance) Instrument 2026/156
Overview
1. The ASIC Corporations (Strata Title Co-Insurance) Instrument 2026/156 (Instrument) modifies disclosure requirements in Part 7.9 so that only one issuer (lead issuer) of jointly issued products under a strata title co-insurance arrangement needs to prepare a PDS instead of each and every issuer. The lead issuer must prepare a Supplementary PDS that contains the name and contact details of each following issuer and the participating share of the lead issuer and each following issuer.
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.