Financial Services Guide
Version March 2020
Affinity Risk Partners (Brokers) Pty Ltd t/a Affinity Insurance Brokers
ABN 15 091 944 580
Financial Services Guide
This Financial Services Guide (FSG) explains:
our products and services;
our remuneration; and
other important information.
Please take the time to carefully read this FSG and keep it safely with your policy documents.
Affinity Risk Partners (Brokers) Pty Ltd t/a Affinity Insurance Brokers (Affinity Insurance Brokers) is part of the Aon Group of companies. We aim to provide you with insurance products and services that protect you and/or enhance your business. To help us achieve this, it’s important that you understand what we do as your insurance broker.
Our FSG contains important information about the products and services Affinity Insurance Brokers offers. It also explains how we, and our representatives, may be remunerated and contains details of our internal and
external complaints handling procedures. By continuing to engage Affinity Insurance Brokers to provide insurance
services, you are, in the absence of a formal written retainer agreement, agreeing to the delivery of our services and our remuneration as described in this FSG.
If you are buying a Retail Product (as defined in the Corporations Act 2001 (Cth)), we will, if and when required, also give you a Product Disclosure Statement (PDS). The PDS contains information from the product issuer about the product and its features to assist you in making an informed decision about whether or not to buy it.
If we give you personal advice about a Retail Product, which takes into account your individual objectives, financial situations or needs, we will, if required, also give you a Statement of Advice (SoA). This contains the advice we have given, the basis of that advice and other information about our remuneration and any relevant associations or interests which may have influenced the advice provided.
Please tell us if you think we can improve in any way and do not hesitate to contact us with any questions that you have. This FSG is also available on our website affinityib.com.au.
How you can instruct us
You can give instructions to us to provide products and services by using the contact details set out in this FSG.
Our products and services
As your insurance broker, we are licensed to deal in and provide advice in relation to general insurance products.
Under our licence, amongst other things, we are able to:
arrange general insurance products to help you protect against insurable risks;
collect information that insurers require from you;
where needed, provide you with information and advice about general insurance products; and
where needed, assist you to make insurance claims.
Arranging your insurances
While cost is always important, the quality of insurance cover offered by a policy is equally important. Insurance that does not match your needs is worthless, however cheap the premium.
As part of the Aon group of companies, one of Australia’s leading insurance brokers, we have many clients in similar businesses and situations with similar risks and needs.
We have access to Aon products (Aon Products) which combine good pricing and quality cover from reputable insurers.
Where we believe it suits your risks and needs, we may recommend an Aon Product (rather than alternative insurance products).
Where we don’t have an Aon Product suitable to your risks and needs we will, unless you agree otherwise, seek quotes from appropriate insurers and help you identify an alternative insurance product. Please note that we cannot guarantee the availability of insurance for your particular risks or the solvency of insurers.
In order to arrange your insurance, we rely on you to provide accurate and complete information. We also rely on you to carefully review all documents we give you (including policies and endorsements) containing the terms of your cover (including applicable limits, sub-limits, deductibles and your obligations) to ensure that the
cover suits your needs and so that you comply with your obligations under your policies. Failure to do this may result in uninsured losses. Please advise us immediately if you notice any mistakes of fact or believe the contents do not address your needs.
Who do we act for?
As your insurance broker we normally act for you in providing our insurance services. We will tell you before or at the time of purchase if we are not acting for you in providing any part of our service. For example, an insurer may give us ‘binding authority’ to arrange or enter into insurance products on their behalf. We could also agree to
handle or settle claims on an insurer’s behalf. We will inform you if we act for an insurer in this way.
The people who provide our services
We usually provide our services using Affinity Insurance Brokers employees.
However, in some cases we may use “Distributors”.
“Distributors” are third parties who we have authorised to deal in specific insurance products on our behalf.
Distributors can only provide factual information and are not authorised to provide any advice.
Our Distributors are not employees of Affinity Insurance Brokers and do not receive a salary. Instead they may be paid a percentage of the commission and/or other part of our remuneration for the services they provide. This percentage may range between 0% and 38% of Affinity Insurance Brokers’ remuneration.
Our correspondence with you and/or correspondence from our third party representatives will disclose if a Distributor is providing a financial service on our behalf.
Unless we have agreed in writing otherwise, our remuneration will comprise the following:
a commission paid to us by the insurer;
a fee which will be agreed with you beforehand; or
a combination of commission and fee.
A commission paid to us by an insurer is standard for insurance brokers and our rates of commission typically range from 5% to 35% of the premium (before taxes and statutory charges) depending on the type of insurance. Different insurers may pay different rates of commission.
In addition, we may also receive the following:
a broker service charge for policy invoicing, premium collection and remittance, for issuing policies and other insurance administration work. This charge will appear on your invoice and will vary depending on the work involved and the commission we receive;
in some cases, you may need specific risk advice (such as a business interruption analysis or a valuation). We will charge a separate fee for these services, which we will agree with you beforehand;
in some cases, an insurer may quote its premium net of our commission. Where this happens we may increase the broker service charge by the amount of commission that would normally apply to this type of insurance or agree a specific fee with you;
where we provide you with a SoA in relation to a Retail General Insurance Product, we will advise you of the full amount of our remuneration in relation to that Retail General Insurance Product; and
we may charge an additional administration fee for any change to the policy that requires us to produce a further statement or invoice or a certificate of currency. We may deduct and retain this fee from any premium refund due to you from the insurer, arising in connection with the policy change.
Please note that we treat our remuneration as fully earned when we issue you with a tax invoice, unless we have a written agreement with you that varies this statement.
You agree that we may retain all our commission, fees and other remuneration in full in the event of any mid-term cancellation of a policy or future downward adjustment of premium. However, where you cancel your insurance policy under a statutory cooling-off entitlement, we will refund
to you any part of our remuneration already paid to us for that policy at the date of cancellation. You also agree that the insurer and Affinity Insurance Brokers may offset such remuneration from any premium refund you are entitled to. A surcharge may apply to all credit card payments.
The nominated surcharge will be displayed on your invoice. We want to be entirely transparent about our remuneration so please ask us if you want more information or have
Do we receive any other remuneration for our service?
The law requires us to pay your premiums (and certain moneys paid to us by insurers for your account) into a trust account pending payment to the insurer. We are entitled to earn and retain interest on these monies to cover the cost of providing these transactional services. Our standard credit terms for premium payments are 14 days from the date of our invoice. We pay insurers within the period dictated by the law or earlier if the insurer requires.
We may offer to arrange premium funding to help spread the cost of your insurance premiums over the year. When Affinity Insurance Brokers arranges premium funding, we act as agent for the premium funder for the purposes of facilitating your initial loan application, and not as your credit provider or finance broker. Affinity Insurance Brokers
may also act as the premium funder’s agent in cancelling any insurance where you have failed to meet your repayment obligations. Additionally, Affinity Insurance Brokers may act as your agent to apply for and accept subsequent funding in respect of your loan facility for future purposes, for instance to fund endorsements, modifications and renewals of your insurances, unless otherwise instructed by you.
The details of your premium funding arrangement will be set out in your separate agreement with the premium funder. We have a profit share arrangement with the premium funder where we receive a percentage of the
profit they make from the funding we arrange for our clients. We may also receive a separate commission which is a percentage of the amount of funding provided to you.
Should your funded insurance policy be cancelled mid-term, for any reason, you should be aware that there may be a shortfall between the balance of the amount payable under the premium funding contract and the return premium as:
the premium funder may be entitled to charge interest for up to the full term of the loan period under the terms of the funding contract;
there will be no pro rata refund of our commission or fee as our remuneration is fully earned when we issue you with a tax invoice, unless we have a written agreement with you to the contrary; and
in some cases, insurers may apply minimum premiums to policies.
Affinity Insurance Brokers is part of a large financial and professional services group of companies (Aon Group). There are other parts of the Aon Group that may earn and retain remuneration in connection with insurance we
place for you as described below. However, these are kept separate and distinct from the services that we provide to you so that they do not influence from acting in conflict with your interests. The following are more frequent examples.
The Aon Group has separate reinsurance broking companies that arrange insurance for insurers (called reinsurance).
In some cases, an insurer may ask one of our reinsurance broking companies to arrange reinsurance in respect of insurance purchased by you, in which case that company may also earn commission or other remuneration.
Aon Product Design and Development
The Aon Group has a separate product design and development company (APDD) which has developed electronic quoting and placement platforms to enable Aon to efficiently obtain competitive quotations from panels of established insurers under the terms of insurance products also developed by APDD (Aon Products).
The work that APDD does reduces the insurers’ work and costs. In recognition of this, the insurers pay APDD an annual and/or a per transaction license fee for access to and use of these platforms and/or Aon Products. The transaction licence fee is calculated in a range between 2% and 7.5% of premium applying to the transaction. We will advise you where we intend to use an Aon Product as part of your insurance placement prior to arranging your insurance. Your invoice will identify Aon Products as well as policies placed using these quoting and placement platforms.
Third Party Administrators
We or another Aon Group company may provide services to a third party administrator (TPA), who in turn provides services to us, which typically include general policy administration and claims handling services, on behalf
of one or more underwriters. The Aon Group company engaged by the TPA may receive remuneration from the TPA for the services it provides to the TPA.
Profit Share Arrangements
We or another Aon Group company may sometimes receive additional remuneration from insurers, their agents (such as third-party administrators) and other service providers through profit commissions on certain products where they are legally permissible and meet standards and controls to address conflicts of interest. Because the amount of the profit share earned may vary depending on factors relating to performance of a portfolio over a given
period, the amount of profit commission attributable to any particular product will typically not be known at the time of placement. We will not recommend a product to you unless it is suitable for your needs. If we receive a profit share in relation to a product we recommend to you, we will advise you at the time of recommendation.
Binder or Coverholder Authority
Aon Group companies may earn remuneration where they act as an agent for an insurer under a binder or Coverholder authority in respect of insurance that we may arrange for you. We will not recommend placing any insurance with such an agent unless it is an appropriate solution for your general needs. Your invoice will identify where a product that has been recommended to you has been developed and or managed by another company in the Aon Group.
Consulting Services to Insurers and Reinsurers
Aon Group companies also provide specialised consulting services to insurers and reinsurers for which they may receive remuneration.
Affinity Insurance Brokers and its staff may also receive non–monetary benefits from insurers such as sponsorships of conferences and client functions and meals and entertainment. Affinity Insurance Brokers has and monitors compliance with a policy that ensures that these do not create a conflict with your interests.
Wholesale Brokers, MGA’s and International Markets
To meet your insurance needs, we may need to access certain insurance markets, including international insurance markets, through a wholesale broker or a Managing General Agent (MGA) who acts on behalf of an insurer. We may
use an Aon Group company for this and they may receive commission on the policies they place at standard rates in that particular market. Your Affinity Insurance Broker Client Relationship Manager will provide you with details of this commission prior to arranging your insurance.
Lloyds & London Market Aon Carrier Charges
Many insurers in the London market outsource specific administrative services to the Aon Group, which reduces their work and costs.
In return, the Aon Group is paid fees known as Aon Carrier Charges which are typically in a range between 2.5% and 6%
of premiums applying to a transaction.
Companies in the Aon Group hold equity and loan stock in other companies as part of our investment portfolio. These companies may occasionally be utilised in the delivery
of the services we provide and sometimes some of these companies may have an interest in Aon.
You can view details at http://www.aon.com/about-aon/ corporate-governance/guidelines-policies/market- relationship.jsp. We will specifically notify you where we have a material interest in any company involved in the services we provide that is not obviously part of the Aon Group.
Should you require further information regarding any of the above forms of indirect remuneration or benefits please contact your Affinity Insurance Brokers Client Relationship Manager.
What Do We Do With Our Remuneration?
A large part of the remuneration we receive pays the salaries and wages of our staff and the remuneration we may pay
to our Distributors. Our remuneration also funds normal business expenses such as rent and technology.
We often work closely with trade or industry associations in developing and distributing certain insurance products. Sometimes these associations endorse the insurance product we offer to their members. We may pay part of our remuneration or an agreed referral fee to an association for their assistance or endorsement.
We also have relationships with various banks and other businesses which, when they consider it appropriate, will recommend Affinity Insurance Brokers and our services to their clients. We may pay part of our remuneration or an agreed referral fee to these referrers in recognition of this introduction.
Other important information
Conflicts of Interest
Conflicts of interest may arise in circumstances where some or all of your interests as our client are, or may be, inconsistent with some or all of our interests.
We have a conflict of interest policy and procedure, including training and monitoring, to ensure we are aware of and manage any conflict of interest. Our company, staff and our representatives must comply with this policy and procedure.
Where a conflict is unavoidable, we will consult with you and manage the conflict in such a way as to avoid prejudice to any party.
Professional Indemnity Insurance
In accordance with the requirements of the Corporations Act 2001 (Cth), Affinity Insurance Brokers maintains adequate Professional Indemnity insurance. This insurance cover extends to claims in relation to our conduct as an Australian Financial Services Licence holder and our employees and representatives both past and present, to compensate clients or their beneficiaries for loss or damage suffered if
we provide negligent advice.
Premium and Invoice Calculations
We adopt industry practice in calculating local statutory charges.
All amounts referred to in our invoices, unless stated otherwise, are to be treated as exclusive of GST. Where the invoice is for a foreign currency amount, any applicable GST is converted to Australian dollars at the exchange rate published by the Reserve Bank of Australia at 4pm on the business day prior to the date of the invoice.
We make every effort to correctly determine the premium and statutory charges that apply to your insurance, however,
occasionally, errors can occur. We may correct any such error and (except to the extent prohibited by law) we will not be responsible for any loss you suffer as a result of the error or its correction.
We value the privacy of personal information and are bound by the Privacy Act 1988 (Cth) when we collect, use,
disclose or handle personal information. We collect personal information to offer, provide, manage and administer the many financial services and products we and our group
of companies are involved in (including those outlined in this FSG).
Collection and Use of Corporate Client Information
Aon gathers data containing information about its clients and their insurance placements, including, but not limited to: names, industry codes, policy types, and policy expiration dates, as well as information about the insurance companies that provide coverage to its clients or compete for its clients’ insurance placements. This information is maintained in one or more databases. Aon may use or disclose information about its clients, if it is required to
do so by foreign or Australian law, Aon policy, pursuant to legal process or in response to a request from foreign or Australian law enforcement authorities or other government officials. In addition to being used for the benefit of Aon’s clients, these databases also may be accessed by other Aon affiliates for other purposes, including providing consulting and other services to insurers for which the Aon Group may earn compensation.
Due to the global nature of services provided by the Aon Group, the information you provide may be transmitted, used, stored and otherwise processed outside the country where you submitted that information. If you have questions about Aon Group data processing or related compensation, please contact your Affinity Insurance Brokers Client Relationship Manager.
Insurance Brokers Code of Practice
Affinity Insurance Brokers is a member of the National Insurance Brokers Association and is bound by their Code of Practice (the Code). The Code sets out standards for brokers to follow when dealing with clients, including requirements to inform clients of remuneration arrangements and any conflict of interest. The Code does not form part of any retainer we have with you and your rights relating to any breach of the Code by us are limited to remedies available under the Code.
Service Issues and Complaints
We are committed to providing quality services to our clients. This commitment extends to giving you easy access to people and processes that can resolve a service issue or complaint.
If you have a complaint about the service we have provided to you, please address your enquiry or complaint to the staff member providing the service, or phone 03 8587 7777 during normal office hours.
If we are not able to resolve the issue immediately, or within five days, we will refer it to the Complaints Officer, who
will review the complaint and advise you in writing of the expected time for resolution.
Affinity’s Complaints Officer will identify actions to remedy the complaint where possible and endeavour to provide you with a decision within 20 business days of the date of notification of your complaint.
If your complaint is complex and may take longer than 20 business days to resolve, we will advise you of the expected timeframe required to address your complaint and will keep you informed of its progress.
If you are dissatisfied with Affinity’s final response to your complaint, you may be able to refer your complaint to the Australian Financial Complaints Authority (AFCA).
AFCA is an independent external dispute resolution scheme approved by the Australian Securities and Investments Commission (ASIC) and its services are free to you. We are a member of this scheme and we agree to be bound by its determinations about a dispute.
Please note that before AFCA can investigate your complaint, they do require you to have first provided us with the opportunity to address the complaint.
Further details regarding AFCA can be obtained from their website (www.afca.org.au), or alternatively you can contact AFCA as follows:
Mail: Australian Financial Complaints Authority GPO Box 3, Melbourne VIC 3001
If you have a complaint or query relating to the terms of your coverage or claims under your policy, please contact your insurer directly, whose details may be found in the PDS or policy wording.
Complaints relating to a Lloyd’s policy
Complaints that involve a policy bound by a Lloyd’s market are subject to the requirements of the General Insurance Code of Practice. This involves a two stage complaints handling process.
Please refer your complaint to the Affinity’s Complaints Officer using the contact details above. We will respond to your complaint and will endeavour to provide you with a decision within 15 business days of the date of notification of your complaint. If we are unable to respond to your complaint within 15 business days because we have not received all the necessary information, we will advise you of the expected timeframe required to address your complaint and any other additional information that we require.
If you are dissatisfied with your response, you have the right to escalate the matter directly to Lloyd’s.
This stage is managed by Lloyd’s Senior Dispute Resolution Officer who can be contacted as follows:
Phone: 02 9223 1433
Email: firstname.lastname@example.org Mail: Lloyd’s Australia Limited
Level 9, 1 O’Connell Street
Sydney NSW 2000
If you have any questions about our services or anything in this FSG, please contact your Affinity Insurance Brokers
Client Relationship Manager or Affinity Insurance Brokers in Melbourne on 03 8587 7700.
Affinity Risk Partners (Brokers) Pty Ltd t/a Affinity Insurance Brokers
ABN 15 091 944 580 AFSL No. 241185
1265 Nepean Highway Cheltenham
phone 03 8587 7777
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