Understanding Informed Consent for Insurance Commissions

As of 9 July 2025, new regulations require ARs to obtain informed consent from clients before receiving commissions for recommending or arranging insurance products. These changes are part of the government’s broader Delivering Better Financial Outcomes (DBFO) reforms, aimed at improving transparency, clarifying commission disclosures, and reducing conflicts of interest in the insurance industry.

What Is Informed Consent?

Informed consent means your client understands that you’ll be paid a commission by the insurer and agrees to that before any insurance policy is placed or renewed. It’s not just about ticking a box, it’s about making sure the client knows how you’re being paid and is okay with it.

This consent must be clearly explained and documented separately from any product advice or disclosure documents.

What This Means for ARs

“Informed consent isn’t just a formality, it’s about being upfront and building trust,” says Suzanne Love, Compliance Manager at repX. “Clients deserve to know how you’re paid, and they need to consent to it before you move forward.”

ARs must get this consent before placing, changing, or renewing a policy. The client needs to understand the commission arrangement and give their consent before anything is finalised.

The Consequences of Failing to Obtain Informed Consent 

Not following the rules can lead to serious consequences, including:

•  •  Regulatory action

ASIC may issue penalties, require remediation, or impose licence conditions if your consent process isn’t up to standard.

•  •  Reportable breaches

Ongoing or repeated failures could trigger breach reporting under section 912D of the Corporations Act.

•  •  Reputational damage

A lack of transparency can lead to client complaints and harm the trust they place in you and your licensee.

Getting informed consent isn’t just about staying compliant, it’s about doing the right thing. It helps build a transparent, client-first relationship.

“This goes beyond compliance,” Suzanne adds. “It’s about giving clients clarity and control over how you’re paid.”

As the regulatory environment continues to evolve, it’s essential for ARs to stay updated on the latest guidelines.

Need support understanding informed consent and your compliance obligation?

Contact the repX team:

📧 Stacy Finnegan – stacy@repx.au

📧 Angela O’Neil – angela@repx.au 

📧 Suzanne Love – suzanne@repx.au