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Insurance Regulations 2024
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Turn the raw legal text into a practical explanation grounded in Insurance Regulations 2024.
(1) This section is made for the purposes of paragraph 3A(3)(b) of the Act. (2) An Australian insurance broker must not certify a matter under subparagraph 8(2)(b)(iii) of this instrument in relation to the risks insured under a contract of insurance unless, after making reasonable enquires, the Australian insurance broker is satisfied, on reasonable grounds, that, for each of the risks: (a) there is no Australian insurer that will insure against the risk; or (b) the terms (including price) on which any Australian insurer will insure against the risk are substantially less favourable to the insured than the terms on which the relevant unauthorised foreign insurer will insure against the risk; or (c) insurance with an Australian insurer would be substantially less favourable to the insured than with the relevant unauthorised foreign insurer because of other circumstances.
Note: Example: Paragraph (c)—the insured and the unauthorised foreign insurer have a pre‑existing relationship, and the maintenance of that relationship will have significant benefits for the insured.
(3) An Australian insurance broker that certifies a matter under subparagraph 8(2)(b)(iii) in relation to the risks insured under a contract of insurance: (a) must keep written records of: (i) its inquiries into the matters mentioned in subsection (1) of this section; and (ii) its reasons for being satisfied of those matters; and (b) must, if requested by the insured, give a copy of the certificate to the insured.
Note: Failure by an Australian insurance broker to properly discharge the obligations in this section may be a matter affecting the financial services licence of that broker. For financial services licenses, see Part 7.6 of the Corporations Act 2001.