The Australian insurance market is composed of life, general, and health insurance sectors. It is regulated by various laws including the Insurance Act of 1973 and Insurance Contracts Act of 1984. Key regulatory bodies include the Australian Prudential Regulation Authority (APRA), Australian Securities and Investments Commission (ASIC), and Australian Competition and Consumer Commission (ACCC). Insurance brokers play an important role in advising clients and negotiating policies between clients and insurers according to standards set by laws and organizations like the National Insurance Brokers Association (NIBA).

1. Regulatory and legal frame work in Australia

2. Australian Insurance market is composed by three
sectors: Life insurance, General insurance and health
insurance. All the laws pursuant to insurances industry is
governed by Australian insurance law. The
commonwealth parliament has authority with respect to
insurance and insurance companies under section 51 XIV
and XX of the Australian constitution. The Insurance Act
1973 and Insurance contract Acts 1984 are the main acts
to which the body of law refers. Although, there are
several other regulatory and statutory bodies like,
Australian Prudential Regulation Authority (APRA) has
power under” Insurance Act 1973” to regulate banks,
general and life insurance companies to ensure that
these institutes keep their financial promises and fulfill
obligations to policy holders.
INSURANCE MARKET IN AUSTRALIA

3. Continued..
Also, Australian
Securities and
Investments
commission (ASIC) and
Australian Competition
and Consumer
Commission (ACCC) to
regulate and govern
upon advice and
disclosure of insurance
product in the market.

4. Life Insurance
Majorly divided into two parts –
Term life insurance and disability
income insurance. In Term life
insurance the insurer will get the
insurance for fixed period and
premium, wherein if insurer dies
during the term the insured amount
will be given to the beneficiary.
Disability income insurance or DI is
insured for the income of the
beneficiary’s income against his/her
risk of disability which creates
hindrance for completing the work
or core functions of their work.

5. • It is divided into two parts –
Liability Insurance and
Property Insurance. In Liability
insurance it covers the insured
person/company’s liability
against financial claims
imposed on him or her during
lawsuits. It typically offers the
protection against third party
insurance claims wherein
payments are made to the
suffering party which is not
included in insurance contract
on behalf of the insured in
consideration of the premium.
General Insurance

6. • This type of insurance
protects risks to
property against theft ,
natural calamities, acts
of terrorism and war. It
includes specialized
insurance like flood
insurance, earthquake
insurance, boiler
insurance and home
insurance.
Property Insurance

7. • The Australian government
provide universal health
insurance and Medicare.
These type of insurances
are publicly funded
operated by authority of
Medicare Australia. Other
health care schemes like,
Pharmaceuticals benefits
and state territory programs
are separate from health
policy to Medicare these
programs are also operated
by Medicare under “The
Health Insurance Act1973”.
Health Insurance

8. THE MAIN AUSTRALIAN INSURANCE BODIES
Financial Services Council
Australian and New Zealand Institute of
Insurance and Finance
Institute of Actuaries of Australia
Underwriting Agencies Council
Insurance Council of Australia

9. INSURANCE BROKER AND
INTERMEDIARIES

10. Insurance broker are professional advisers who worked on
behalf of their clients. The brokers may deals with any
specific or different types of insurances. They also have
access to many different policies and benefits related to
them which make them give better options to their clients
according to the clients necessities. The brokers have
direct contact with various insurance companies and
therefore they are aware of benefits, exclusions of costs of
competing policies.
INSURANCE BROKER AND INTERMEDIARIES

11. While taking insurance many people end up taking
unwanted or unnecessary policies and therefore it is
very important for them to chose right broker to
help them getting value for money and better policy.
Insurance broker posses good knowledge about the
insurance market and ability to negotiate
competitive premiums with insurance companies
and place the cover to the insurer.
They can also assist you in risk management
program and business perform specialized work to
design a customized insurance with risk prevention
and minimization strategies served towards reducing
premium costs.
INSURANCE BROKER AND INTERMEDIARIES

12. The Australian brokers have license of Australian
Financial Services (AFS) and they must meet the
standards set by Financial Services Reforms Act which
is a part of Corporation Act. The Australian Securities
and Investment Commission regulates the conduct of
all licensees. The Brokers are required to subscribe to
Financial Ombudsman Service (FOS) this is design to
resolve disputes between clients and broker and
decision of which is binding in nature.
INSURANCE BROKER AND INTERMEDIARIES

13. The National Insurance Broker Association (NIBA)
introduced the “ Insurance Brokers code of Practice” to
harmonize the relation between policyholder, broker
and Insurance companies. The Brokers are bound to
follow the ethics, terms and practices mentioned in
code.
Apart from Insurance Brokers code of Practice, the
Insurance (Agents and Brokers) Act is passed in 1984 by
the parliament of Australia. This Act defines various
terms related with Broking business. The terms like
Insurance Broker, Insurance intermediary, insured,
insurance commissioner, binder, corporation etc.
INSURANCE BROKER AND INTERMEDIARIES

14. This act clearly states the way of operation of
brokers and intermediaries. Under sec-10 of the
act the provision of Insurance intermediaries states
that- The “insurance intermediaries other than
broker to operate under written agreements”
which imposes contractual liabilities on
intermediaries. It also states Liability of insurer for
agents and employee under sec-11. The act
provide us that certain intermediary can act as
agent of insurer under sec- 12.
INSURANCE BROKER AND INTERMEDIARIES

15. The brokers cannot carry their business unless they are
register. Within 6 months they have to register and after
expiration of said period they shall not carry business in
relation to Life insurance or General insurance according
to sec-19 of the Act. Registration of the brokers is
provided under sec-21 of the Act, failure to get register as
an agent they shall be held guilty under sec-19 and
penalty of $500 for and individual and for corporation
$2,500 shall be charged according to sec-26 of the Act.
The Duties of the brokers is mention under sec-27 and
failure to perform those the penalty of $1,000 and $5,000
shall be charged on individual or corporation respectively.
INSURANCE BROKER AND INTERMEDIARIES

16. Section-29 of the Act provides that brokers are not
bound by certain agreements in case of General
insurance and Life insurance. Brokers and
Intermediaries are also bound to disclose certain
information provided under Sec- 32 & 33
respectively failure to do so the penalty of $1,000
for an individual and $5,000 for corporation in case
of brokers and for intermediaries $1,000 or 6
months imprisonment and $5,000 for corporations
will be imposed.
INSURANCE BROKER AND INTERMEDIARIES

17. The liability of Director’s and Employee’s are provided
under Sec-40 of the Act stating - A director of a company,
or an employee or agent (whether of a corporation or of an
individual), who knowingly permits or authorizes a
contravention of this Act by the company, corporation or
individual, as the case may be, is guilty of an offence
against this Act and is punishable by the penalty provided
in respect of that contravention.
INSURANCE BROKER AND INTERMEDIARIES

18. The Prosecution part is defined in Sec-46 for any
offence committed against this Act. The power of
making regulation is given to Governor-General
under this Act which also states that regulations
might be different with respect to persons carrying
on business in relation to Life insurance and
General insurance.
INSURANCE BROKER AND INTERMEDIARIES

19. Thank you !