The Monitor has issued a new version of the s30 Notice. The notice previously published on 12 May 2017 is now withdrawn and there is no need to send this notice out to policyholders.
Unfortunately, it appears to us that the new notice serves little useful purpose in the context of the deferral of the new regime by the Government. Industry has questioned its usefulness and it may be that Treasury will seek to have the obligation removed but we do not know if this will be the case.
The Monitor has published an FAQ document relevant to the new notice setting out what it requires, guidance and the timing for compliance – see http://www.eslinsurancemonitor.nsw.gov.au/node/87
Of interest is the specific FAQ on “I am an insurance broker. Does the obligation created by the Section 30 order apply to me?”
The Monitor takes the view that an insurance broker is an “insurance company”, at its broadest on the basis that brokers act “on behalf of” insurers because they receive commission. This is a surprising view but needs to be taken into account.
The Monitor will allow insurance companies a period of up to 12 weeks from the date the obligation becomes effective, to achieve full compliance with the obligation for “relevant policies” as defined. The order became effective on 5 June 2017, the next business day after its publication in the NSW Government Gazette on 2 June 2017.
A “relevant policy” catches residential building insurance, residential contents insurance and any combination of the two. The Monitor has advised that this catches strata insurance and landlords insurance or home buildings and/or contents insurance included in small business and farm packages.
The Insurance Monitor can, on issuing further Guidance include other ‘relevant’ regulated contracts of insurance.
For policies other than relevant policies, the Insurance Monitor will not undertake enforcement action regarding non-compliance unless further Guidance on the application of the obligation to these contracts has been issued.
The Monitor has the discretion to take enforcement action against any non-compliance of section 30. The maximum penalty for non-compliance is set at 200 penalty points, which currently equates to $22,000. The penalty applies to each individual instance of non-compliance.
For further information, refer to the Monitor’s website.
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