The Australian Securities and Investments Commission has announced interim class order relief until June 2005 that permits insurance brokers to pay money received in a single payment from a client into an account that must be established and maintained under section 981B of the Corporations Act.
The relief will only apply where the insurance broker holds an Australian Financial Services licence and reasonably believe at least part of the payment constitutes client monies.
Generally a licensee may only hold client monies or monies relating to client transactions in a section 981B account.
Non-client monies, such as remuneration payable to the broker or monies not connected with a financial service or the client’s financial product must not be paid into these accounts.
To rely on the interim relief an AFS licensee must:
- Be an insurance broker;
- Reasonably believe the payment may comprise, in whole or in part, monies subsection 981A(1) of the act applies;
- Take all reasonable steps to identify non-client monies within five business days of such monies being paid into the account and, if the licensee is not able to so identify such monies within the first five business days, it must continue to take all reasonable steps to identify the monies; and
- Pay out of the account any monies the broker has identified as non-client monies as soon as possible and, in all cases, within five days of identifying the monies.