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Labor rectifies ‘unintended’ commission ban

The Albanese government has fixed wording errors in a bill that would have accidentally outlawed commissions for general insurance brokers and other intermediaries providing general advice.

As previously reported, the mistake was discovered when the bill was introduced to parliament in March to put a new provision in the Corporations Act requiring commission disclosure and consent in relation to personal advice to retail clients. Section 963BB will also apply to life and consumer credit insurance commissions.

The Insurance Council of Australia and National Insurance Brokers Association have welcomed the updated Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024.

An ICA spokesperson told the change “removes the unintended error to ban commissions for insurance provided under the general advice model …  this change aligns with a position ICA has long advocated for”.

NIBA CEO Richard Klipin says the amendment "will ensure general insurance advice will remain accessible and affordable to all Australians". 

"We appreciate the work undertaken by government in addressing stakeholder concerns and look forward to continuing to work with the Minister for Financial Services, Stephen Jones MP and the broader Treasury team to support the implementation of the remaining Quality of Advice reforms," Mr Klipin said.

An explanatory memorandum says the amendments ensure commissions for relevant insurance products received by people who provide general advice remain exempt from the ban on conflicted remuneration. “This corrects an error of the bill which would remove the exemption for commissions relating to relevant products where general advice is provided.”

Mr Jones earlier clarified that it remains the government’s intention to retain an insurance exemption from the ban on conflicted remuneration, after the mistake in section 963BB was discovered by industry watchers.

Mathew Kaley, principal at law firm McCabes, says the revised bill has addressed the concerns raised.