Australian Securities & Investments Commission consults on remaking incidental retail cover relief from retail client obligations for business insurance

The Australian Securities & Investments Commission has invited feedback on a proposal to remake its relief for “incidental retail cover” in business insurance contracts, which exempts insurers and brokers from certain retail client obligations under Chapter 7 of the Corporations Act 2001 where the cover is part of an otherwise wholesale business insurance product. The current relief is due to end on 16 August 2025, and ASIC proposes to extend it for five years. ASIC considers the instrument to be operating effectively and efficiently and to remain a necessary and useful part of the legislative framework, aimed at reducing regulatory burden and avoiding retail client compliance costs being incurred and passed on to businesses. “Incidental retail cover” is described as minor retail cover that is incidental and inseparable from a wholesale insurance product, such as personal effects cover within wholesale business property insurance that benefits employees, with conditions intended to keep the relief tightly targeted, including that it does not apply where the retail cover is offered at an optional expense or requires a separate purchase decision. Feedback is due by 5 pm AEST on 16 June 2025, with the consultation paper referenced as CS 19, and ASIC indicates it will continue to monitor the relief’s appropriateness in light of regulatory experience and stakeholder feedback.