ASIC Deferred Sales Model Exemption (IAL—Business-Related Livestock Insurance) Instrument 2022/167

Overview

The ASIC Deferred Sales Model Exemption (IAL—Business-Related Livestock Insurance) Instrument 2022/167 was introduced to address a specific regulatory gap concerning business-related livestock insurance products sold by Insurance Australia Limited (IAL). Enacted by Rhys Bollen, a delegate of the Australian Securities and Investments Commission (ASIC), this instrument aims to exempt certain insurance products from the provisions outlined in sections 12DQ, 12DR, and 12DS of the Australian Securities and Investments Commission Act 2001. The policy objective behind this exemption is to streamline and facilitate the sale of business-related livestock insurance products under specific conditions, thereby supporting the agricultural sector while ensuring compliance with regulatory standards. The exemption is set to remain in effect until 5 October 2026, after which it will be repealed.

Scope and Application

The ASIC Deferred Sales Model Exemption (IAL—Business-Related Livestock Insurance) Instrument 2022/167, issued by Rhys Bollen, a delegate of the Australian Securities and Investments Commission, provides specific exemptions under the Australian Securities and Investments Commission Act 2001 for Insurance Australia Limited, identified by its Australian Business Number (ABN) 11 000 016 722, concerning business-related livestock insurance products. The instrument came into effect on the day following its registration on the Federal Register of Legislation, and it will be repealed on 5 October 2026. This exemption applies to business-related livestock add-on insurance products that are offered or sold in conjunction with another product or service for business purposes, with the price of the insurance not exceeding $1,000. The primary objective of these add-on insurance products must be to cover events such as the death of a livestock animal or the loss of use of a bull, ram, or stallion due to impotency, infertility, or incapacity for natural service.

Key Provisions

The ASIC Deferred Sales Model Exemption (IAL—Business-Related Livestock Insurance) Instrument 2022/167 exempts certain insurance products from specific sections of the Australian Securities and Investments Commission Act 2001 (sections 12DQ, 12DR, and 12DS). This exemption applies to business-related livestock add-on insurance products sold by Insurance Australia Limited (IAL), which has the Australian Business Number (ABN) 11 000 016 722. The exemption is effective from the day it is registered on the Federal Register of Legislation and will be repealed on 5 October 2026. The Act imposes specific obligations on IAL when selling business-related livestock add-on insurance products. These products must be offered or sold to consumers in connection with acquiring another product or service in the course of their business. Additionally, the price of these add-on insurance products must not exceed $1,000. The main purpose of these products must be to provide insurance cover for events such as the death of a livestock animal or the loss of use of a bull, ram, or stallion due to becoming impotent, infertile, or incapable of natural service. Failure to comply with the conditions set forth in the instrument may result in legal consequences. Although the instrument does not explicitly state penalties for non-compliance, breaches of the Australian Securities and Investments Commission Act 2001 can result in significant civil and criminal penalties. For instance, non-compliance with ASIC regulations can lead to fines for corporations up to $1.8 million and individuals up to $360,000, as well as potential criminal charges. Such outcomes underscore the importance of adhering to the requirements set forth in the exemption instrument.