Financial Services Guide Lockton Companies Australia Pty Ltd Australian Financial Services Licence 291954 ABN 85 114 565 785 Perth, WA (Head) Office Sydney, NSW Office Melbourne, VIC Office Ph: (+618) 9217 0800 Ph: (+612) 9236 0600 Ph: (+613) 9827 7624 Fax: (+618) 9380 4206 Fax: (+612) 9231 6140 Fax: (+613) 9827 7630 FINANCIAL SERVICES GUIDE (FSG) This FSG is designed to assist you in deciding whether to use any of our services such as: Our products and services; How we get paid; and Other important information including managing any conflict of interest and / or any complaint you may have about our service. RETAIL CLIENT DISCLOSURE INFORMATION Where we provide a recommendation to a retail client, in relation to a retail product, we will provide you with additional information as listed below: Remuneration: we will disclose the dollar amount of remuneration we will be paid by the insurer on the front of your Tax Invoice. Disclosure Statement: we will include a disclosure clause on your Tax Invoice schedule that will outline information about any remuneration and/or other benefits we may receive and any interests or associations we may have that may influence us in providing the advice. Product Disclosure Statements: if we offer to arrange the issue of an insurance policy to you, we will also provide you with a Product Disclosure Statement (PDS), unless you already such PDS from the insurer. The PDS will contain information about the particular insurance policy which will enable you to make an informed decision about purchasing that policy. From when does this FSG apply? This FSG applies from 14 th February 2013 and remains valid until a new or revised FSG is issued to replace it. Who is responsible for the financial services provided? Lockton Companies Australia Pty Ltd (LCAPL) What kinds of financial services are you authorised to provide to me and what kinds of financial product(s) do those services relate to? LCAPL is authorised to provide advice and deal in General Insurance Products to wholesale and retail clients, acting as our client s agent. Services Offered We offer a range of services to assist you to protect your assets. These include reviewing and advising on your insurance needs, arranging and renewing insurance contracts on your behalf, arranging premium funding, if required and assisting with insurance claims. Will I receive tailored advice? To enable us to provide advice which is appropriate to your circumstances, you will need to provide us with complete information about the risk(s) to be insured, your situation and your needs and objectives. You should also tell us about any relevant changes as they occur. If you do not, your insurances may not meet your needs and objectives. If you are unable or choose not to provide some information to us, we will be unable to comprehensively review your circumstances. As this may limit our ability to make appropriate recommendations, you will need to assess the appropriateness of our advice to your needs before acting on it. 1
When we recommend an insurance policy for you, we will usually only consider the policies offered by the insurers or insurance providers whose security has been examined and approved by our Market Security Committee. In giving you advice about the costs and terms of recommended policies, we have not compared those policies to other policies available, other than from those insurers we deal with regularly. We undertake a review of all insurers with which we deal with on an annual basis. When considering the renewal of your insurance policy, we will only seek additional quotes where the premium quoted by your current insurer is greater than 15% of the prior year premium or if there is a significant change to the policy wording. How can you be contacted? You can provide us with instructions in person, by telephone or email or in writing. How will I pay for the services provided? For each insurance product the insurer will charge a premium that includes any relevant taxes, charges and levies. We often receive a payment based on a percentage of this premium (excluding relevant taxes, charges and levies) called commission, which is paid to us by the insurers. However, in some cases we will also charge you a broker administration fee. All fees charged will be shown on the invoice that we send you and for retail clients we will also disclose the dollar amount of any commission earned. Alternatively, we may rebate all commissions to you and charge you a fee based upon the nature of the service we provide. Commission and fees are earned for the policy period and we will be entitled to retain all commission and fees in respect of the full policy period in relation to policies placed by us. Terms of Payment You must pay us within 14 days of the date of the invoice or, in the case of a renewal, before the expiry date of the contract of insurance. You can choose to pay by credit card, electronic funds transfer (EFT), cheque and/or cash. Cancellation/Alteration We cannot cancel a contract of insurance: without written instructions from a person(s) who is authorised to represent each of the parties who are named as insured s in the contract of insurance. which is subject to the Marine Insurance Act 1909. If there is a refund of premium owed to you as a result of a cancellation or alteration to a policy, we will retain any fee we have charged you. We may also retain commission depending on our arrangements with the insurer. Interest Earned on Trust Account When you pay us your premium it will be banked into our trust account. We retain the commission from the premium you pay us and remit the balance to the insurer in accordance with our arrangements with the insurer. We will earn interest on the premium while it is in our trust account or we may invest the premium and earn a return. We will retain any interest or return on investment earned on the premium. How are any commissions, fees or other benefits calculated for providing the financial services? Our commission will be calculated based on the following formula: X = Y% x P In this formula: X = our commission, Y% = the percentage commission paid to us by the insurer. Our commission earned varies between 0% and 30%, P = the amount you pay for any insurance policy (less any government fees or charges included in that amount). Our charges include GST. Some of our charges may be tax deductible. Sunrise Where we have used electronic data interface (Sunrise) to process your policy, we may receive an additional commission amount of between 1.0-2.5% for utilising this system. This amount is included in our commission earned and is not an additional charge to you. Introducers We may pay third parties introducers who have introduced you to us or referred us to an insurer, either an agreed commission amount of up to 25% or a set amount. Where a payment is made to a third party an introduction of business, we will disclose this dollar amount to you on the Tax Invoice Schedule. How are our Associates paid? Our Associates that will assist you with your insurance needs will be paid in two ways salary, and a bonus or incentives which are based on a number of factors including achievement of company goals. 2
Other benefits From time to time our Associates may receive certain hospitality benefits (such as tickets to sporting events, movies, meals, bottles of wine, hampers). The receipt of these benefits is not based upon the volume of business placed with the provider, but is more of an ad hoc reward received in the normal course of duty and are in compliance with our Global policies in relation to Conflict of Interest, Bribery and Corruption. You have the right to request for further information in relation to the remuneration, the range of amounts or rates of remuneration, and soft dollar benefits received by the licensee and/or representatives. LCAPL may from time to time receive a benefit from preferred product providers by way of sponsorship of educational seminars, conferences or training days. Details of benefits above AU$300 will be maintained in a Register. Profit Share/Reward Agreements We may also receive a profit share commission from insurers and/or insurance agencies if a particular portfolio of business reaches a certain level of profitability. Payments from these companies are based on, the volume of certain business we provide to them, certain loss ratio target levels being met and the profit that they earn on certain business within an agreed time frame. These payments do not affect the premium paid by you. Premium financing If we arrange premium financing for you we may be paid a commission by the premium finance firm in the range of 0% - 3%. We may also charge you a fee (or both). The commission that we are paid by the premium finance firm is usually calculated as a percentage of your insurance premium (including government fees or changes). If you instruct us to arrange or issue a product, this is when we become entitled to the commission. When we arrange premium financing for you, you can ask us what commission rates we are paid for that financing arrangement compared to the other arrangements that were available to you. The amount of our commission and any fee that we charge will be set out in the premium finance contract. Anti-Money Laundering and Counter Terrorism Finance Act As a financial service provider, we have an obligation under the Anti-Money Laundering and Counter Terrorism Finance Act to verify your identity and the source of any funds. This means that we will ask you to present identification documents such as passports and drivers licences. We will also retain copies of this information. We assure you that this information will be held securely. We cannot provide you with services if you are unwilling to provide this information. What arrangements do we have in place to compensate clients for losses? LCAPL has a professional indemnity insurance (PI) in place. The PI covers us and our Associates for claims made against us and our Associates by clients as a result of the conduct of us or our Associates in the provision of financial services. LCAPL confirms that it has arrangements in place to ensure it continues to maintain Professional Indemnity insurance in accordance with s.912b of the Corporations Act 2001 (as amended). In particular our Professional Indemnity insurance, subject to its terms and conditions, provides sufficient indemnity to the Sum Insured and our representatives and employees in respect of our authorisations and obligations under our Australian Financial Services Licence (AFSL). This insurance will continue to provide such coverage for any representative or employee who has ceased work with LCAPL or work done whilst engaged with us. Privacy Statement We are committed to protecting your privacy in accordance with the principles of the Privacy Amendment (Privacy Sector) Act 2001 (Privacy Act). We use the information you provide to advise about and assist with your insurance needs. We maintain a record of your personal profile, including details of insurance policies that we arrange or issue for you. We may also maintain records of any recommendations or advice given to you. We will retain this FSG and any other FSG given to you as well as any Statement of Advise, PDS or short-form PDS that we give or pass on to you for the period required by law. A copy of our privacy policy is available on request. If you wish to look at your file please ask us. We will make arrangements for you to do so. Complaints and Disputes If you are not fully satisfied with our services, please contact our Complaints/Disputes Manager, Adam Rhodes and tell him about your complaint or dispute. He will acknowledge your complaint/dispute in writing and endeavour to resolve your problem within 20days. If your complaint cannot be resolved to your satisfaction by us, you have the right to refer the matter to the Financial Ombudsman Service Limited (FOS) with whom LCAPL is a member. FOS can be contacted on 1300 780 808 or via email at www.fso.org.au. FOS s mailing address is GPO Box 3, Melbourne, VIC 3001. Alternatively, you can contact the Australian Securities & Investment Commission at their freecall infoline on 1300 780 885. 3
If you ask us to act as your general insurance broker, we will do so on the terms set out in this FSG. Unless you tell us otherwise in writing, we assume that you agree with these terms. If you have any queries, please do not hesitate to contact us on the numbers provided on the front of this document. IMPORTANT INFORMATION Duty of Disclosure In order to make an informed assessment of the risk and calculate the appropriate premium, your insurer needs information about the risk you are asking it to insure. For this reason, before you enter into a contract of insurance, you have a duty under the Insurance Contracts Act 1984 to disclose to your insurer every matter that you know, or could reasonably be expected to know, is relevant to the insurer s decision whether to accept the risk and, if so, on what terms. The duty also applies when you renew, extend, vary or reinstate a contract of insurance. You do not have to disclose anything that: reduces the risk to be undertaken by the insurer; or is common knowledge; or your insurer knows, or in the ordinary course of its business, ought to know; or if the insurer has waived your obligation to disclose. If you do not comply with your duty of disclosure, your insurer may be entitled to reduce its liability in respect of a claim or may cancel your contract of insurance. If the non-disclosure was fraudulent, the insurer may be able to avoid or cancel the contract of insurance from its inception. This would have the effect that you were never insured. One important matter to be disclosed is the history of losses suffered by the person(s) seeking insurance or any closely associated person or entity. As you are responsible for checking that you have made complete disclosure, we suggest that you keep an up to date record of all such losses and claims. If you have any questions about whether information needs to be disclosed, please contact us. Material Changes You must also notify your insurer of any significant changes which occur during the period of insurance. If you do not, your insurances may be inadequate to fully cover you. We can assist you to do this and to ensure that your contract of insurance is altered to reflect those changes. Cooling Off Period If you decide that you do not need a contract of retail insurance which has been arranged on your behalf, you have a minimum of 14 days from the earlier of the date you receive confirmation of the contract and the date it was arranged to change your mind. You must tell the insurer in writing that you wish to return the insurance contract and have the premium repaid. If you do so, the insurance contract will be terminated from the time you notified the insurer and the premium will be returned. The insurer may retain its reasonable administration and transaction costs and a short term premium. You cannot return the contract of insurance if it has already expired or if you have made a claim under it. New Business Contact us as soon as possible if you need cover for a risk or property that is not insured. If you need immediate cover, we can usually obtain an interim contract of insurance (which is generally valid for a month or less). To arrange this, we will need details of the property or risk and all other information which you need to disclose to the insurer. We will then send you a proposal for completion. You will need to complete and sign this and return it to us as soon as possible and before the interim cover expires. We will send the original insurance contract documents as soon as they are issued correctly by your insurer. As these are legal documents, you should keep them in a safe place. Renewals We will give you at least 14 days notice of expiry of any insurance contract which we arranged or last renewed for you. At that time we will send you an offer to renew the insurance contract and invoice you for the cost of renewal. If you want to change the details of the cover, contact us as soon as you receive the renewal offer. If you wish us to renew the contract on your behalf, you must provide us with written instructions to do so and/or pay the premium and other charges before the date shown on the invoice. In some circumstances we may be able to arrange for the insurer to cover you temporarily before 4
payment is received, but we cannot guarantee this. We will notify you when renewal has been affected. If you arranged or renewed insurance directly with an insurer or through another broker, we will not be responsible for notifying you of expiry or arranging renewal unless you ask us to do so. Variations You should carefully monitor and review that your insurance contract is adequate to cover your assets or business activities. If you want to vary any cover, e.g. by increasing the sum insured or adding other property, please provide us with details of the changes you require and any other information you need to disclose to the insurer. We will arrange the variation with the insurer and provide you with written confirmation. Claims We will receive your claims notifications, assist and advise you regarding the scope of cover and pass the information to the insurer. If a loss adjustor is appointed we shall, with your permission, pass on your contact details and co-ordinate meetings. In the case of a major loss, we can attend the initial meeting with the loss adjustor if you wish us to. We will promptly forward to you all claims documentation, insurance company settlement cheques and other information. If any claims are outstanding when you terminate our appointment as your insurance broker, we will provide details of the claim(s) to your new insurance broker so that they may continue to negotiate settlement on your behalf. Sums Insured Average and Co-Insurance Some insurance contracts require you to bear a proportion of each loss or claim if the sum insured is inadequate to cover the amount of the loss. These provisions are called average or co-insurance clauses. If you do not want to bear a proportion of any loss, when you arrange or renew your contract of insurance, you must ensure that the amount for which you insure is adequate to cover the full potential of any loss. If you insure on a new for old basis, the sum insured must be sufficient to cover the new replacement cost of the property. Interests of other Parties Some insurance contracts do not cover the interest in the insured property or risk of anyone other than the person named in the contract. Common examples are where property is jointly owned or subject to finance but the contract only names one owner or does not name the financier. Please tell us about everyone who has an interest in the property insured so that we can ensure that they are noted on the contract of insurance. Waiver of Rights Some insurance contracts seek to limit or exclude claims where the insured person has limited their rights to recover a loss from the person who was responsible for it, e.g. by signing an agreement which disclaims or a limits the liability of the other party. Please tell us about any contracts of this type which you have or propose to enter into. Standard Covers The Regulations to the Insurance Contracts Act set out standard terms for the cover which is provided by motor vehicle, home buildings, home contents, sickness and accident, consumer credit and travel insurance (including a minimum amount of insurance). If an insurer wants to alter these terms or offer less than the minimum amount of insurance they must clearly inform you in writing that they have done so. They can do this by providing you with a Product Disclosure Statement or a copy of the insurance contract. Unusual Terms If an insurer wants to rely on a term in a contract of insurance which is not usually included in contracts that provide similar cover, they must clearly inform you in writing of that term. Again, they may do so by providing you with a copy of the insurance contract. Lockton Companies Australia Pty Ltd, Level 1, 50 Subiaco Square Road, Subiaco Western Australia 6008 AFSL: 291 954 ABN: 85 114 565 785 Version 3: February 2013 www.lockton-asia.com 5