Further guidance on breach reporting

Further guidance has been developed to assist members to understand and implement the new reporting obligations that came into effect on 1 October 2021.

The attached advice outlines the various civil and criminal offence provisions that trigger automatic breach reporting, as relevant to general insurance brokers.

The new laws are significantly more onerous than existing breach reporting requirements. In particular, the new regime broadens the definition of ‘core obligations’ in that a breach or likely breach of core obligations will be considered a ‘significant and reportable event’ if it meets either the criminal offence or civil penalty test.

• Criminal offences – the breach of the core obligation is constituted by the commission of an offence under any law and the commission of the offence is punishable on conviction by a penalty that may include imprisonment for a maximum period of:
  • if the offence involves dishonesty—3 months or more; or
  • in any other case—12 months or more; or
• Civil penalties – the breach of the core obligation is constituted by the contravention of a civil penalty provision under any law, other than a civil penalty provision prescribed by regulations.

While other provisions may also trigger a ‘significant and reportable event’, including breaches of ‘obligations’ relating to deceptive and/or misleading conduct and a breach of ‘obligations’ resulting in material loss or damage to clients, NIBA’s advice only deals with the civil offence and criminal offence triggers.

ASIC is currently consulting on a number of amendments aimed to correct technical or drafting defects, remove anomalies and address unintended outcomes. As such, this advice may be updated to reflect legislative changes.