Insurers in call for cost relief
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Tuesday, 30 October, 2001 - 21:00
STILL reeling from the combined effects of the US terrorist attacks and the GST, the insurance industry is calling on the Federal Government to put together an assistance package to help with the compliance costs of the looming Financial Services Reform Act.
Starting March 11 2002, the FSR Act will be rolled out over a two-year period during which insurers, agents, multi-agents and brokers will have to scramble to meet the necessary requirements to obtain an Australian Financial Services licence or become an authorised representative of a licence holder.
Industry members are bracing themselves for a mountain of compliance costs and are asking the Federal Government to help small businesses cope with legislation reform as it did when the GST was introduced.
Small businesses received $200 GST vouchers from the Government to put towards upgrading their software systems and Insurance Agents Association of Australia WA representative Ned Schepis believes the introduction of the FSR Act warrants similar aid.
“The FSR Bill is bigger than the GST,” Mr Schepis said.
“The GST was a once-off cost and it was manageable. Once you had your systems in place you were right.
“But the FSR Act means ongoing costs to train and monitor staff, as well as the increased amount of paper-work.”
To become an AFS licence holder, insurance professionals must meet a series of criteria, which includes the requirement that staff and authorised representatives of the licence-holder be trained and monitored in their provision of a financial service on an ongoing basis.
AFS licences will be issued and the activities of licensees scrutinised by the Australian Securities and Investments Commission.
Mr Schepis said while larger companies would be able afford the compliance costs, it was the smaller players he was concerned about.
“I think the Government should help out smaller agents and brokers with the cost of educating and training staff … perhaps they could subsidise some registered courses,” he said.
“Big industry players will be able to cover the costs. For example insurers could simply push the cost of training their staff on to the consumers by increasing insurance policy premiums.
“But small agents and brokers can’t do that.”
A spokesman for Federal Finance Minister Joe Hockey said an assist-ance package had not been contemplated because the financial services industry had been given ample time to prepare for the new laws.
“As it is a major piece of legislation, the industry has been given a huge a-mount of time to prepare for the change. The Bill had been around for three years in one form or another and the industry was widely consulted,” he said.
The spokesman noted that, at a recent meeting between Mr Hockey and more than 40 industry representatives, the issue of an assistance package had not been raised.
Small agents and brokers looking to the Australian Labor Party for relief are likely to be disappointed, as a spokesperson for Labor Treasury spokesman Simon Crean said the party was happy with the FSR legislation.
p More stories, page 6.
Starting March 11 2002, the FSR Act will be rolled out over a two-year period during which insurers, agents, multi-agents and brokers will have to scramble to meet the necessary requirements to obtain an Australian Financial Services licence or become an authorised representative of a licence holder.
Industry members are bracing themselves for a mountain of compliance costs and are asking the Federal Government to help small businesses cope with legislation reform as it did when the GST was introduced.
Small businesses received $200 GST vouchers from the Government to put towards upgrading their software systems and Insurance Agents Association of Australia WA representative Ned Schepis believes the introduction of the FSR Act warrants similar aid.
“The FSR Bill is bigger than the GST,” Mr Schepis said.
“The GST was a once-off cost and it was manageable. Once you had your systems in place you were right.
“But the FSR Act means ongoing costs to train and monitor staff, as well as the increased amount of paper-work.”
To become an AFS licence holder, insurance professionals must meet a series of criteria, which includes the requirement that staff and authorised representatives of the licence-holder be trained and monitored in their provision of a financial service on an ongoing basis.
AFS licences will be issued and the activities of licensees scrutinised by the Australian Securities and Investments Commission.
Mr Schepis said while larger companies would be able afford the compliance costs, it was the smaller players he was concerned about.
“I think the Government should help out smaller agents and brokers with the cost of educating and training staff … perhaps they could subsidise some registered courses,” he said.
“Big industry players will be able to cover the costs. For example insurers could simply push the cost of training their staff on to the consumers by increasing insurance policy premiums.
“But small agents and brokers can’t do that.”
A spokesman for Federal Finance Minister Joe Hockey said an assist-ance package had not been contemplated because the financial services industry had been given ample time to prepare for the new laws.
“As it is a major piece of legislation, the industry has been given a huge a-mount of time to prepare for the change. The Bill had been around for three years in one form or another and the industry was widely consulted,” he said.
The spokesman noted that, at a recent meeting between Mr Hockey and more than 40 industry representatives, the issue of an assistance package had not been raised.
Small agents and brokers looking to the Australian Labor Party for relief are likely to be disappointed, as a spokesperson for Labor Treasury spokesman Simon Crean said the party was happy with the FSR legislation.
p More stories, page 6.