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ARTICLE · 12 OCTOBER 2007

Sting In The Tail

Rockwell Olivier
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What exactly is adequate compensation? Many people will respond that it is the requirement under section 912B of the Corporations Act for an Australian Financial Services Licensee to have in place a system of compensation for aggrieved and affected clients.

AustraliaInsurance
Peter Bobbin
Peter Bobbin

What exactly is adequate compensation? Many people will respond that it is the requirement under section 912B of the Corporations Act for an Australian Financial Services Licensee to have in place a system of compensation for aggrieved and affected clients.

It complements the risk-management systems and compliance practices critical to the licensing requirements of a financial services business in Australia.

Central to adequate compensation is the professional indemnity insurance policy.

In its August 2002 report to the Senate on the state of the PI market in Australia at that time, the Financial Planning Association declared that the PI problem had “reached crisis point”.

It took some time for premiums to return to more normal levels, but the crisis still exists, and it has become personal. Not too many people are aware of this.

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