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Cash Settlement Fact Sheet – Relief

Earlier this year, relief was implemented for claims handling and settling AFS Licensees in relation to the provision of a Cash Settlement Fact Sheet (CSFS). The relief allows AFS Licensees to make a cash settlement offer in emergency situations or cases of immediate need without first providing a CSFS. The relief is subject to conditions and will expire in 2025.

To rely on the exemption the following requirements must be satisfied:

(a) the client has expressly instructed the AFS Licensee they are in immediate need of a cash payment;
(b) the verbal cash settlement offer has been made within 14 days of the insurable event that is the subject of the claim; and
(c) the cash settlement offer (and any other immediate cash payments under the claim) does not exceed $5,000.

Where the above requirements are satisfied, the AFS Licensee must do the following:

(a) verbally give the client the following information:

(i) the options for settlement legally available;
(ii) the sum insured;
(iii) the amount of the cash settlement offered in total and as a breakdown of each component;
(iv) a statement that the client should consider obtaining independent legal or financial advice before agreeing to the cash settlement; and
(v) an outline of the client’s rights of review;

(b) take all reasonable steps to give the client a CSFS within:

i) 48 hours of the verbal cash settlement offer being made, if the CSFS is given electronically; or
(ii) 5 business days of the verbal cash settlement offer being made, if the client has notified they cannot or do not want to be given the CSFS electronically;

(c) take all reasonable steps to make the cash payment within 2 days of the client accepting the verbal cash offer; and
(d) provide the client with the right to have the accepted cash settlement offer reversed on terms that include the following:

(i) the client may exercise the right of refusal up to 12 months after the date the cash payment was made;
(ii) no interest or fees on the amount of the cash payment are payable by the client.


AFS Licensees that provide claims handling and settling services have the obligation to provide a CSFS. The obligation arises where the AFS Licensee:

  • offers retail clients a cash payment to settle all or part of a general insurance claim; and
  • there are other legally available options to settle the claim (i.e.: repair or replacement).

The CSFS must be provided at the time the cash settlement offer is made and must include certain prescribed information.

The obligation to provide a CSFS applies to the AFS Licensee, their Authorised Representatives as well as any person acting on the AFS Licensees behalf at the time the cash settlement offer is made.

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