AN interim approach to the regulation of mutual risk products has been released.
Mutual risk products provide an alternative to conventional general insurance products.
Generally, MRPs involve participation in a "mutual" scheme based around particular professions, small business associations, franchise operations or community groups.
They cover a range of risks such as professional indemnity and public liability risks.
Australian Securities and Investments Commission executive director financial services regulation Ian Johnston said the commission considered MRPs to be financial products for the purposes of the Corporations Act because they represent both facilities for managing financial risk and interests in a managed investment scheme.
"As such, ASIC generally expects MRP providers to comply with managed investment scheme and licensing provisions of the Act," he said.
"In specific limited circumstances, ASIC will consider granting relief from the managed investment and licensing provisions of the Act."
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