ASIC Deferred Sales Model Exemption (TFAL—Business Related Motor Vehicle Bailment Insurance) Instrument 2022/166

Overview

The ASIC Deferred Sales Model Exemption (TFAL—Business-Related Motor Vehicle Bailment Insurance) Instrument 2022/166, enacted under the authority of the Australian Securities and Investments Commission Act 2001, addresses a specific regulatory gap concerning the sale of business-related motor vehicle bailment add-on insurance products by Toyota Finance Australia Ltd. This instrument, which came into effect on the day after its registration on the Federal Register of Legislation, aims to exempt certain insurance products from the application of sections 12DQ, 12DR, and 12DS of the Act, provided they meet the defined criteria. The policy objective is to streamline regulatory requirements for these particular insurance products, facilitating their sale while ensuring consumer protection within specified limits. The instrument, repealed on 5 October 2026, defines a business-related motor vehicle bailment add-on insurance product as one that is offered in connection with another product or service acquisition in the course of a business, does not exceed $1,000 in price, provides insurance cover for the destruction, loss, or damage of a motor vehicle, and is associated with a bailment agreement. This exemption is made under the authority of paragraph 12DY(1)(b) of the Australian Securities and Investments Commission Act 2001 and aims to balance regulatory oversight with facilitating the sale of these specific insurance products.

Scope and Application

The ASIC Deferred Sales Model Exemption (TFAL—Business-Related Motor Vehicle Bailment Insurance) Instrument 2022/166 applies specifically to business-related motor vehicle bailment add-on insurance products sold by Toyota Finance Australia Ltd, as defined in the instrument. This exemption is designed to exclude these particular products from the scope of certain sections of the Australian Securities and Investments Commission Act 2001, namely sections 12DQ, 12DR, and 12DS, which pertain to deferred sales model provisions. The exemption is applicable to products sold by Toyota Finance Australia Ltd, identified by its Australian Business Number (ABN) 48 002 435 181. The instrument commenced on the day after its registration on the Federal Register of Legislation and will be repealed on 5 October 2026. The exemption applies to insurance products that meet specific criteria, including being offered or sold in connection with another product or service in the course of a business, not exceeding a price of $1,000, and providing cover for the destruction, loss, or damage to a motor vehicle that is bailed to the consumer under a bailment agreement.

Key Provisions

The ASIC Deferred Sales Model Exemption (TFAL—Business-Related Motor Vehicle Bailment Insurance) Instrument 2022/166, made by Rhys Bollen, exempts certain business-related motor vehicle bailment add-on insurance products sold by Toyota Finance Australia Ltd (TFAL) from specific provisions of the Australian Securities and Investments Commission Act 2001 (Act). This exemption applies to add-on insurance products sold in connection with a business acquisition or commitment, with a price not exceeding $1,000, and providing insurance for the destruction, loss, or damage of a bailed motor vehicle. This means that sections 12DQ, 12DR, and 12DS of the Act do not apply to these particular insurance products. The Act imposes specific obligations on parties involved in the sale of these insurance products. Toyota Finance Australia Ltd must ensure that the products meet the criteria set out in section 7 of the instrument, including the connection to a business acquisition or commitment, the price limit, and the type of insurance cover provided. The instrument also requires that the motor vehicle be bailed to the consumer under a bailment agreement to which the consumer is a party. These obligations are necessary to ensure that the exemption applies correctly and the products are appropriately regulated. Breaching the terms of this instrument can result in significant consequences. While the instrument itself does not explicitly detail offences, penalties, or consequences for breach, the underlying Act may impose civil or criminal penalties for non-compliance with its provisions. For example, under the Act, a person who contravenes a civil penalty provision may be liable for penalties, including substantial fines and potential imprisonment, depending on the severity and intent of the breach. These consequences serve to enforce compliance and uphold the regulatory framework governing financial products and services in Australia.