Summary

Introduced with the Corporations (Fees) Amendment (Hayne Royal Commission Response) Bill 2020, the bill amends the: Corporations Act 2001 and National Consumer Credit Protection Act 2009 to: strengthen the existing voluntary code of conduct framework by enabling the Australian Securities and Investments Commission (ASIC) to designate enforceable code provisions in approved codes of conduct which, if breached, may attract civil penalties; and establish a mandatory code of conduct framework for the financial services and consumer credit industry through regulations, with the ability to designate certain provisions of civil penalty provisions; Insurance Contracts Act 1984 to: limit the circumstances in which an insurer can avoid a life insurance contract on the basis of non-fraudulent misrepresentation or non-disclosure by an insured; and replace the duty of disclosure for consumer insurance contracts with a duty to take reasonable care not to make a misrepresentation; Australian Securities and Investments Commission Act 2001 to: implement an industry wide deferred sales model for the sale of add-on insurance products; and formalise ASIC's meeting procedures; Corporations Act 2001 to: provide for the interaction of the deferred sales model with the anti hawking obligations; make claims handling and settling a financial service; and ban the hawking of financial products; Australian Securities and Investments Commission Act 2001 and National Consumer Credit Protection Act 2009 to cap the commission that may be paid in relation to add-on risk products supplied in connection with the sale or long-term lease of a motor vehicle; Insurance Act 1973 to restrict the use of the terms 'insurance' and 'insurer'; Superannuation Industry (Supervision) Act 1993 to: impose a new condition on licences held by a body corporate trustee of a registrable superannuation entity; and amend the roles and responsibilities of superannuation industry regulators; Australian Securities and Investments Commission Act 2001 and Corporations Act 2001 to extend the financial services licensing regime to cover a broader range of activities undertaken by superannuation trustees regulated by the Australian Prudential Regulation Authority (APRA); Corporations Act 2001, National Consumer Credit Protection Act 2009 and National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 to: impose new obligations on financial services licensee and credit licensees in relation to reference checking and information sharing, and breach reporting and remediation; and clarify and strengthen the breach reporting regime for financial services licensees and introduce a breach reporting regime for credit licensees; and Australian Prudential Regulation Authority Act 1998 and Australian Securities and Investments Commission Act 2001 to require APRA and ASIC to cooperate and share information with each other, including requiring them to notify each other when they reasonably believe there may be material breaches of each other's legislation. Also makes consequential amendments to five Acts.