ASIC grants conditional relief to facilitate reissue of certain life insurance policies

ASIC has provided conditional relief for life insurers from the design and distribution obligations (DDO) when reissuing life insurance policies in certain, limited circumstances.

The relief is set out in ASIC Corporations (Design and Distribution Obligations—Reissued Life Policies Class Exemption) Instrument 2023/183.

This relief will reduce the regulatory burden for life insurers so they can reissue pre-DDO policies in circumstances that have a low risk for consumer harm. DDO applies to financial products issued on or after 5 October 2021.

For policies issued after 5 October 2021 the relief also provides for the correction of administrative errors and reinstatement of lapsed policies.

Transactions which would involve an insurer reissuing a life policy include exercising a buy back option following payment of a claim or removing an ancillary benefit to reduce premiums.

To qualify for relief the reissued policy must:

  • have originally been issued before 5 October 2021, except where the policy is reissued to correct an administrative error or reinstate a lapsed policy;
  • have been reissued at the request of the policyholder, except where the policy is reissued to correct an administrative error;
  • be reissued on the same terms and conditions without additional underwriting or individual loadings, apart from changes that are necessary to give effect to the transaction; and
  • be issued to the same policyholder.

The instrument will expire on 16 March 2028.



DDO requires firms to design financial products that meet the needs of consumers, and to distribute those products in a more targeted manner.

Life insurance policies can contain provisions that allow the policyholder to request changes to their policies. In some cases, doing so may require the insurer to reissue the policy, which would require them to comply with DDO even if the policy was originally issued before 5 October 2021.

Insurers also reissue policies to reinstate a policy that has lapsed for non-payment of premiums (a common and standard industry practice) or to fix administrative errors.

© Australian Securities and Investments Commission. Reproduced with permission.