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Mixed money rule for insurance brokers

INSURANCE brokers have been given limited relief regarding their ability to pay money into a trust account under section 981B of the Corporations Act.

The Australian Securities and Investments Commission class order allows other money, paid in a single sum together with client monies, to be paid into a trust account established and maintained under section 981B of the act by an insurance broker.

Section 981B generally permits only client monies (which are connected with a financial service provided to, or a financial product held by, the client) to be paid into a section 981B account.

It does not allow non-client monies, such as remuneration payable to the broker, or monies not connected with a financial service or the client’s financial product, to be paid into these accounts.

The class order relief allows a payment into an insurance broker’s section 981B account of mixed payment.

The relief, however, requires the licensee to pay out of the account any non-client money within five business days. The relief is only available to insurance brokers.

 

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