AFSL requirement for insurance rater
The Australian Securities and Investments Commission (ASIC) has made clear that companies providing ratings services to financial planners need to hold an Australian Financial Service Licence (AFSL).
The regulator’s position was revealed in its latest overview of decisions on relief applications, in which it said it had refused licensing relief to a life insurance ratings provider
It said the ratings provider delivered a service to financial advisers that was a qualitative research tool and provided a rating of the terms of various life insurance policies.
“We took the view that the provision of ratings constitutes the provision of general financial product advice and the ratings are intended to influence (or could reasonably be regarded as intending to influence) a person’s decision in relation to a life insurance product,” the ASIC documentation said.
It said that holding an AFSL for the provision of ratings would require the applicant to comply with certain key obligations in the Corporations Act, including ensuring that adequate arrangements are in place for internal and external dispute resolution and for the management of conflicts of interest.
AUTHOR
Mike Taylor
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