Document ID: chunk:federal_register_of_legislation:F2022L00741:body:0:p4
Version: federal_register_of_legislation:F2022L00741
Segment Type: other
Provision Reference: 
Character Range: 8652–11838

insurance activities of the RSE licensee are made aware of, and have processes and controls for monitoring compliance with, the RSE licensee's insurance management framework.

    15.         An RSE licensee must maintain or have access to records of sufficient detail to comply with its obligations under the reporting framework and for a prospective insurer to properly assess the insured benefits that are made available.7 These records must include, for at least the previous five years, the claims experience, membership, sum insured and premiums paid in relation to beneficiaries.

    16.         An RSE licensee's risk management framework must reflect the risks associated with making insured benefits available to beneficiaries as a material risk area identified in Prudential Standard SPS 220 Risk Management.

Insurance strategy

    17.         In addition to complying with section 52(7) of the SIS Act, an RSE licensee's insurance strategy for an RSE must, at a minimum, document:

(a)          how the RSE licensee has regard to each of the factors in section 52(7) of the SIS Act;

(b)          the processes for monitoring, reviewing and renewing the insured benefits made available to beneficiaries;

(c)          the RSE licensee's approach to claims management, regardless of who is

   6   For the purposes of this Prudential Standard, where an RSE licensee is not required under RSE licensee law  to provide for opt-out insurance cover, this requirement does not apply, and 'RSE licensee law' has the meaning given in section 10(1) of the SIS Act.

   7 'Reporting framework' means the reporting standards made under the Financial Sector (Collection of Data) Act 2001.

        responsible for handling claims; and

(d)          the RSE licensee's approach, as outlined in its conflicts management framework, to conflicts that may arise through making available insured benefits to beneficiaries.8

Insurance arrangements

    18.         For the purposes of this Prudential Standard, 'insurance arrangement' means:

(a)          where an RSE licensee makes available insured benefits as described in paragraph 5(a) – an insurance policy document9; or

(b)          where an RSE licensee makes available insured benefits as described in paragraph 5(b) – appropriate documentation of the terms and conditions of the insured benefits;

    and any agreement between the RSE licensee and the insurer or any other party, to the extent that the agreement concerns making available insured benefits.10

    19.         At a minimum, the insurance arrangement must address:

(a)          the level and type of insured benefits made available, including any exclusions;

(b)          the term of the insured benefits;

(c)          automatic acceptance limits (to the extent relevant);

(d)          availability of opt in and/or opt out cover;

(e)          requirements for the beneficiaries' eligibility for, cessation of, and any reinstatement of entitlements to insured benefits where available;

(f)           premium structure, including any variable components;

(g)          procedures for notification and payment of claims;

(h)          dispute resolution