The Coalition Government has today released for consultation draft regulations and legislation to remove the Corporations Act exemption for funeral expenses policies to be treated the same as other financial products.
The removal of this exemption will ensure that consumers have appropriate protections when taking out funeral expense policies to help fund the costs associated with a funeral.
In particular, the Government is acting on the evidence presented by Commissioner Hayne that many indigenous people living in regional and remote communities are being misled and pressured into funeral expenses policies.
These regulations will improve consumer outcomes by requiring providers of funeral expenses policies to hold an Australian Financial Services Licence and be fully regulated by the Australian Securities and Investments Commission.
Providers of funeral bonds, who operate under the exemption, will also be required to hold a licence. The regulations, however, will not require funeral directors to hold a licence when distributing a funeral bond in conjunction with the arrangement of a prepaid funeral, cremation, or burial service.
The Government is taking action on all 76 recommendations contained in the Final Report of the Royal Commission. Restoring trust in Australia's financial system is part of the Morrison Government's plan for a stronger economy.
The exposure draft materials are available on the Treasury website.