Guidance on the Deferred Sales Model for Add-On Insurance

Compliance for yourselves and ourselves is always a high priority in our product structure.  This is evidenced by the way we manage the implementation process of Audit Shield taking into account your and our compliance obligations.

Based on the drafting of the original legislation and the accompanying regulation, from a position of an abundance of caution, and for compliance reasons, we have built a control into the Audit Shield Online Portal [ASOP] to help you and Accountancy Insurance stay within the regulatory requirements of RG275.  This regulatory requirement relates to Add-On Insurances whereby the Australian government have regulated a Deferred Sales Model.  Simply put, this regulation requires a gap to be present between the time a client first becomes your client and the time they can be offered a product like Audit Shield, or other similar products.

Audit Shield can continue to be offered immediately to any client who has been with you for more than six weeks.  This would mean that the vast majority of your clients are not included in this new Australian government regulation.  Therefore, the focus of the regulation is on any new clients that recently (within the last six weeks) joined your business.  Our Account Managers will work with you to filter through your new client list to determine which of your clients can be offered Audit Shield as part of the bulk mail out, and which client offers will have to be sent out a little bit later.

Throughout the year, if you want to create a new client, the control we have built inside ASOP will allow you to create the new client.  However, ASOP will temporary lock the ability to generate an offer for any client who has been with your business for less than six weeks.  ASOP will also automatically unlock the option to generate an offer for any new client after the required six week deferral period.  You will need to log back into ASOP to generate the offer for that client after this period, or ask your Account Manager to do this for you.

For the detail orientated, we have set the controls around a six week deferral because the regulation requires certain additional processes and information to be provided if you would like to offer a new client Audit Shield, or similar product, anywhere between four days and six weeks of them becoming your client.

If you would like more information or have any questions, please do not hesitate to contact your Account Manager.