The Australian Securities and Investments Commission (ASIC) has streamlined its processes to allow insurers to give cash to their clients quickly in emergency situations like the East Coast deadly floods.
Announcing the new policy, ASIC said that in certain circumstances, insurance companies could give emergency payments to consumers without first giving them a Cash Settlement Fact Sheet (CSFS).
The Commission said the change formally came into effect on 11 February of this year, meaning the insurers could apply the streamlined process to emergency payments for insured consumers affected by the current severe weather and flooding in Queensland and Northern NSW.
ASIC said a CSFS was a written document that insurers normally must first give to consumers when they are offered a cash settlement, setting out the options available to settle their claim.
“A CSFS must outline the options available to a consumer; for example having their goods repaired or replaced, or receiving a cash payment,” ASIC said.
“The change streamlines the process for insurers to advance consumers up to $5,000 in cash in emergency situations without first having to issue a CSFS.
“Otherwise it may delay payments to consumers who need immediate access to small amounts of cash in urgent or emergency situations.”
The Commission said the CSFS would no longer need to be issued if the consumer expressly instructed the insurer that they needed immediate financial assistance, or if a verbal cash settlement offer had been made within 14 days of the insurable event that was the subject of the claim.
“The relief is subject to conditions and will expire in 2025,” ASIC said.
It said it would review the operation and appropriateness of the arrangement before it expires.
Further information about insurance claims handling and settling obligations can be accessed at this PS News link.
