Life Insurance product issuers – ASIC introduces some DDO relief

The existing design and distribution obligations (DDO) regime has been slightly modified to reduce the regulatory burden for life product issuers and enable them to reissue pre-DDO policies in circumstances where there is low risk of consumer harm. The relief also provides correction of administrative errors and reinstatement of lapsed policies for policies that were issued after October 2021.

Since October 2021, DDO obligations have applied to Australian Financial Services Licence and Australian Credit Licence holders (Licensees). With the introduction of the ASIC Corporations (Design and Distributions Obligations – Reissued Life Policies Class Exemption) Instrument 2023/183 (the Instrument) in March 2023 and onwards, life insurers are provided with conditional relief from the DDO when reissuing life insurance in limited circumstances.

Who can qualify for the relief?

In order to qualify for the relief, the reissued policy must:

  1. have been issued before 5 October 2021 unless to correct an administrative error in a previous policy or reinstate a prior policy);
  2. have been reissued at the request of the original policy holder (unless to correct an administrative error in a previous policy);
  3. be reissued on the same terms and conditions without additional underwriting or individual holdings. The only differences between the term and effect of the reissued policy and the previous policy are to give effect to:
    • The replacement of the previous policies; 
    • reinstate a previous policy after lapsing due to non-payment of a premium; 
    • correct an administrative error in a previous policy; 
    • change an income protection policy from agreed value to indemnity based cover; 
    • remove or reduce a cover option other than the sum insured; 
    • exercise an option to buy back cover following payment of a sum insured; 
    • combine two or more policies into a single policy cover; or 
    • separate a previous policy into two or more standalone policies that each provide seperate coverage; and 
  4. be issued to the same policy holder

The instrument is set to expire on 16 March 2028.


The DDO applies to a range of financial products under the Corporations Act 2001 (Cth), ASIC Act 2001 (Cth) and the National Consumer Credit Protection Act 2009 (Cth).

Issuers and distributors need to implement and maintain robust product governance arrangements and design financial products that meet the needs of its clients. These arrangements need to consider each stage of product design and development – including design, distribution, monitoring and review.

If you have any questions or concerns regarding your compliance with the DDO regime, you are welcome to reach out to us.

Further Reading:

ASIC grants conditional relief to facilitate reissue of certain life insurance policies
ASIC Corporations (Design and Distribution Obligations—Reissued Life Policies Class Exemption) Instrument 2023/183
Regulatory Guide 274


Check our our Compliance Portal

Subscribe to our Newsletter

Contact Us