REP 42 Insurance broker remuneration arrangements
Released June 2005.
Australian law imposes specific requirements on Australian financial services (AFS) licensees, including insurance brokers, to tell retail clients about remuneration in connection with their provision of financial services. It also requires AFS licensees to adequately manage conflicts between their interests and the interests of their clients (both wholesale and retail).
Late last year ASIC began a review of the remuneration practices of general insurance brokers (brokers) to assess their compliance with legal obligations, particularly in relation to managing conflicts of interest and disclosing remuneration. ASIC also aimed to identify the types of remuneration arrangements that exist between brokers and general insurers (insurers) in Australia.