Financial Claims Scheme needs extra disclosure

John Kavanagh
Authorised deposit-taking institutions and general insurers will have to change their product disclosure statements to include information about the Financial Claims Scheme.

The Minister for Financial Services, Chris Bowen, announced yesterday that new regulations under the Banking Act and the Insurance Act will mean that product disclosure statements relating to protected accounts and protected policies will have to disclose that account holders and policy holders may be entitled to payment under the FCS.

The FCS was established in October 2008 as a way of protecting depositors and some classes of policy holders in cases where the Australian Prudential Regulation Authority determines that an ADI or insurer is insolvent.

The proposed regulations are planned to take effect from April 17 this year for insurance and October 12 next year for banking.

In a statement yesterday Bowen said the government would take submissions on the proposed measures, with a closing date for submissions of February 16.