| Word/Phrase | Meaning |
| Advice | An express or implied (direct or indirect) recommendation or opinion that is intended to influence a person in relation to a Financial Product. |
| ABN | Australian Business Number, issued to businesses that are registered for GST. |
| Advice | Either general or personal advice pursuant to the Financial Services Reform Act 2001 |
| AFS Licensee | A party who possesses an Australian Financial Services licence. |
| ASIC | Australian Securities and Investment Commission |
| ATO | Australian Tax Office |
| Australian Financial Services Licence | A licence issued pursuant to the Financial Services Reform Act 2001. |
| Authorised Representative | A party who provides advice or dealings relating to financial services business and includes both a corporate entity and natural persons. They are Authorised by a Licensee. |
| Binder | An authority granted by an insurer to a broker or agent to handle underwriting or claims on their behalf |
| Broker Licensee | A broker who has obtained an AFS License |
| Claim | The indication to the insurance company of the loss that has occurred. |
| Claim Form | A form filled out by the Insured (or an agent/broker on behalf of the Insured) detailing the facts relating to the loss. |
| Claims Made Policy | A policy which covers claims made during the policy period of the Contract of Insurance (policy) |
| Contract Of Insurance | Policy issued by the Insurer. |
| Contribution | The amount provided by the Insured or others to a claim under the Contract of Insurance (Policy). |
| Cover Note | A Cover Note or Interim Contract as it is referred to in the Insurance Contracts Act is usually issued by the insurer is issued to provide temporary cover whilst the completed documentation is being arranged and is provided to the insurer for consideration. |
| Co-Insurance or Average Clause | The co-insurance or average clause is written into policies primarily to encourage clients to ensure they have a sum insured that is sufficient to obtain the maximum protection from the policy. Most policies allow a sum insured that is within 80% of the replacement value without the clause coming into effect. If the sum insured is below the 80% then it is considered that this variance is based on the client knowingly under insuring and ‘average’ is applied. Put simply, the % of your sum insured as it relates to the Replacement Value is applied to any partial loss claim. |
| Dealing |
Chapter 7 of the Corporations Act defines ‘dealing’ as: (a)applying for or acquiring a financial product; (b) issuing a financial product; (c) for securities or managed investment schemes, underwriting the securities or interests; (d) varying a financial product; or (e) disposing of a financial product. |
| Deductible or Excess | The amount payable by the insured or others towards the cost of a claim under the Contract of Insurance (policy) |
| Disclosure | Every matter that the Insured knows or could reasonably be expected to know that is relevant to the Insurer’s decision to accept the risk and if so on what terms. |
| Endorsement | A written or printed recording on the Policy or an annexure to the Policy which alters provisions (terms or conditions) of the Contract of Insurance. |
| Financial Product | Is a facility through which, or through the acquisition of which, a person does one or more of the following:(a) makes a financial investment; (b) manages financial risk; (c) makes non-cash payments See Chapter 7 of the Corporations Act for a full definition |
| Financial Services | Providing advice or dealing in financial products. |
| Financial Services Guide (FSG) | A Financial Services Guide issued to a Retail Client before or at the time of providing Financial Services as per the requirements as set out in the FSRA. |
| FSRA | The financial services reform programme implemented by the Financial Services Reform Act 2001 together with regulations promulgated pursuant thereto and Policy papers issued by ASIC. |
| GST | The Commonwealth Government’s goods and services tax regime implemented by the New Tax System legislation |
| Hold Harmless | An agreement whereby one party will not hold the other liable in the event of loss or injury |
| IEC | Insurance Enquiries and Complaints Ltd |
| Indemnity | The potential recovery that the Insured have under a Contract of Insurance (Policy) which is payable by the Insurer in event of claim. |
| Input Tax Credit | Accounting credit in respect of GST paid |
| Insurable Interest | The subject matter of the insurance which is protected by the Contract of Insurance (Policy) and in which the Insured has a financial or pecuniary interest at the time of loss. |
| Insurable Risk | Risk that is capable of being Insured by an Insurer who assumes the risk from the Insured. |
| Insured (Client) | Is a consumer (customer) who has purchased a financial product or seeks advice in respect of a financial product. |
| Intermediary | Either an AFS Licensee, Authorised Representative or their employees. |
| Misleading or Deceptive Representation | A statement by the insured or their broker which conveys a false or wrong impression |
| Misrepresentation | A statement by the Insured or their Broker which conveys a false or wrong impression. |
| Non-disclosure | A failure of the insured to provide information (disclosure) to the insurer |
| Policy Disclosure Statement (PDS) | A Policy Description Statement issued by the Insurer and provided to a retail Client by the Intermediary before at the time of providing Financial Services as per the requirements as set out in the FSR. |
| Personal Advice | Has the same meaning as defined in the FSRA and includes personal advice by way of a recommendation or opinion by the Intermediary which is in response to a client’s unique situation and needs and intended to influence or be reasonably regarded as intending to influence the client in relation to the financial product. |
| Policy Wordings | The explanation of the different clauses in an insurance contract or slip. |
| Privacy Commissioner | The Commissioner appointed under the Privacy Act 2000 |
| Proposal Form | The application form completed by the person applying for the insurance. |
| Proximate Cause | The most directly related uninterrupted cause which causes the injury or damage. |
| Renewal | The reissuing of a Contract of Insurance for a further period of insurance. |
| Renewal Notice | The notice given by the Insurer to the Insured informing the Insured that the Contract of Insurance is due to expire on a given date. |
| Retail Client | A client where the supply of the retail product is to an individual or a small business (ie A business which employs less than 100 people if it manufactures goods or otherwise if it employs less than 20 people). |
| Retail Product | A financial product falling into one or either of the following categories:– motor vehicle Policies: – home building and/or home contents Policies – sickness & accident Policies – consumer credit Policies – travel Policies – personal & domestic product Policies – any other Policies as may be prescribed by the FSR |
| Retail Product | Contract of Insurance (policy) designated as “Retail” under the FSRA |
| Risk | The potential loss the Insured may have through the loss or damage to their assets or their liability to others. |
| Schedule | A statement attached or part of an insurance Policy document where there are a multiplicity of locations, items, etc detail involved that form part of the Policy. |
| Small Business | The definition in the IEC’s Terms of Reference for small business is an individual or a company that has no more than five employees (including working proprietors) at any one time; and that has an annual revenue (including related enterprises or bodies corporate or other associated entities) under $400,000 |
| Statement of Advice | Written personal advice given by a provider of financial services and contains matters which are prescribed under the FSRA |
| Subrogation | The right of an Insurer to “stand in the shoes” of the Insured and have all the rights that the Insured has to recover any money paid out under the Policy from the responsible party. |
| Unregistered Insured | Insured who is not registered for GST |
| Utmost Good Faith | Each party must enter into the Contract of Insurance (Policy) with good faith and communicate every fact and circumstance which may influence the other in entering the contract. Latin term – Uberrima Fideii. |