Generating Insurance Consent From Xplan

Informed Consent For Insurance Obligations

What are your obligations?

If you are an AFS licensee or representative that receives monetary benefits (e.g. commissions) in connection with issuing or selling life insurance to a client while providing, or being likely to provide, personal advice to that client, you must:

• obtain the client’s informed consent to receive the benefit before the insurance is issued or sold

• have the client’s written consent (or a copy of it), or a written record of any verbal consent that the client gave, and

• as soon as practicable after the client provided informed consent, give the client a copy of the written consent, or a copy of the written record of the client’s verbal consent: see section 963BB(1).

When do the insurance obligations NOT apply?

Circumstances where the informed consent requirement does not apply for life insurance products:

• Issues or sales before 9 July 2025: The informed consent requirement does not apply to monetary benefits given in connection with insurance issued or sold before 9 July 2025: see section 1708E(1).

• Non-monetary benefits: Non-monetary benefits whose value is less than $300, or similar benefits are not given on a frequent or regular basis, and; benefits for education and training purposes or information technology software or support

• Renewals of life risk insurance: The informed consent requirement does not apply to monetary benefits given in connection with renewals of life risk insurance, if

  • the representative disclosed to the client before the client agreed to be issued or sold the insurance the expected renewal period(s) as part of the period over which monetary benefits covered by the consent could be given, and

  • the rate or frequency of monetary benefit upon renewal is less than the rate or frequency of monetary benefit disclosed to the client before the original consent

What information needs to be disclosed to the client for informed consent?

Before a client can provide informed consent, you must disclose the following information to them:

• the name of the insurer under the relevant product if known

• the rate of the monetary benefit that you will receive:

  • expressed as a percentage range of the policy cost for general insurance (e.g. 10–20% of the premium), or

  • expressed as a percentage of the policy cost payable for life risk insurance and consumer credit insurance

• the frequency with which you will receive the monetary benefit, and the period over which the benefits covered by the consent could be given (if more than one monetary benefit will be given in connection with the issue or sale)

• the nature of the services that you will provide to the client in relation to the relevant product (if any)

• a statement that it is a requirement of the law that the client’s consent must be obtained before the payment of an insurance commission, and

• a statement that the client’s consent, once provided, is irrevocable: see section 963BB(1)(c).

What Is Changing In Xplan?

There are no changes to the Wizard in Xplan.

In the SOA Settings, under ‘What recommendations are you providing?’, when you select ‘Insurance Recommendations’, in the new Insurance Consent text will automatically pull through to the SOA.

The Disclosure Page:

The Disclsoure Page in the SOA now includes:

• the insurance commission table.

  • the name of the insurer under the relevant product if known.

  • the rate of the monetary benefit that you will receive.

  • expressed as a percentage of the policy cost payable.

• the frequency with which you will receive the monetary benefit, and the period over which the benefits covered by the consent could be given (i.e. Annualised)

• a statement that it is a requirement of the law that the client’s consent must be obtained before the payment of an insurance commission, and

• a statement that the client’s consent, once provided, is irrevocable: see section 963BB(1)(c).

• Reference to the signing and dating the Authority to Proceed to consent to the fees being received.

The Authority To Proceed (ATP):

The Authority To Proceed includes a bullet point outlining that the client consents to the representative receiving the monetary benefits outlined in the insurance disclosure section.

The client can sign the ATP as informed consent.

Why Have We Structured This Change Like This?

The benefits of this structuring of the informed consent are as follows:

• The required insurance consent statements are integrated with the existing insurance product commission disclosure table.

• Integrating the consent into the existing Authority To Proceed signature page means only one client signature/s, rather than requiring an addition, separate, client signature for the insurance consent.

Get In Touch

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