See the one page mind map which summarises an ACL holder’s compensation obligations.  Click on the diagram to download it.

Interestingly, RG 210 is less prescriptive than ASIC’s RG 126, which deals with compensation requirements for AFSL holders. 

As an ACL holder, you must have in place adequate arrangements for compensating consumers for loss and damage suffered as a result of breaches of the National Consumer Credit Protection Act 2009 by the licensee or its representatives.RG210 explains that you can comply with this obligation by having: 

• adequate PI insurance; or
• an alternative arrangement approved by ASIC.

Time saving tip:  Every year, you pay your PI broker a healthy commission for placing your cover.  So, ask your broker to confirm in writing (and in detail) how your policy complies with RG 210.  Get them to do the work!  (Of course, you’ll still need to document internally how your financial resources will be adequate to pay the premium, excess and cover any policy exclusions.)

Questions?  Leave a comment below or give Kathryn Wardrobe a call.  

Compensation and insurance arrangements – a summary of Regulatory Guide 210 by Holley Nethercote Commercial Lawyers is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 Australia License.

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