NIBA's response to the proposed changes to the Quality of Advice legislation

The amendments address the concerns raised by NIBA and other stakeholders.

NIBA welcomes the amendment to the Treasury Laws Amendment Bill, which 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.

Treasury has issued an amendment that addresses the unintended drafting error that inadvertently removed the conflicted remuneration exemption for brokers who provide general advice.   

The amendments address the concerns raised by NIBA and other stakeholders that if left unresolved, would have made general risk advice harder to access for Australian consumers.   

As reported earlier, when the legislation was tabled in the Australian parliament before, the proposed draft included an unintended oversight that would have impacted brokers.  

In the previous version of the draft, the conflicted remuneration exemption for general insurance commissions had been removed except where the broker was providing personal advice and had met the commission disclosure and consent obligations. 

The Assistant Treasurer and Minister for Financial Services Stephen Jones had issued a clarification at the time that the previous wording in the legislation – which has now been amended – was not intentional.  

The Minister had clarified that the government had always intended to “maintain the current exemptions for conflicted remuneration on insurance matters, except that advisers will now need to seek their client’s consent before accepting commissions if the adviser provided personal advice."   

Through this amendment, the original intent of the government is now reflected accurately and brokers providing general advice to their clients will fall under the exemption for conflicted remunerations.  

This proposed legislation is the first tranche of the broader Delivering Better Financial Outcomes package, with the government deciding to adopt a phased approach to legislate the outcomes from the Quality of Advice Review report.