TERMS &
CONDITIONS

MECON Insurance Pty Ltd
ABN 29 059 310 904 | AFSL 253106

TERMS AND CONDITIONS OF TRADE

Effective date: 15 November 2024

These Terms and Conditions of Trade (T&Cs) apply to financial services business between MECON Insurance Pty Ltd (MECON) and any Insurance Broker (Broker) with a current Australian Financial Services Licence (AFSL) from and including the Effective Date. These T&Cs replace any prior T&Cs between MECON and any Broker. Any Broker wishing to advise on and deal in insurance products provided by MECON, agrees to be bound by these T&Cs.

1. Background

The Broker carries on a financial services business to provide financial product advice for insurance products and deal in a financial product by applying for, acquiring, varying or disposing of an insurance product provided by MECON subject to the Broker’s AFSL authorisation conditions.

In consideration of the Remuneration (set out at section 8 below) from MECON, the Broker agrees to advise and deal in an insurance product provided by MECON.

2. Relationship

The Broker holds an AFSL that authorises it to advise and deal in insurance products to retail clients, wholesale clients or both. The Broker will advise MECON immediately in writing if its AFSL is varied, suspended or cancelled.

MECON acts as agent for insurers, unless otherwise advised to the Broker in writing from MECON.

The Broker acts as agent for its clients.

The Broker is not an agent of MECON. These T&Cs do not create any form of binder, employment, joint venture, partnership or trust between MECON and any Broker. The Broker will not provide or purport to provide any financial services on behalf of MECON.

The Broker is solely responsible for the actions and omissions of its Authorised Representatives, agents, employees, contractors and referrers.

3. Arranging Insurance – Closings and Hold Covered

The Broker must accept the offer for the contract of insurance in writing prior to or on the inception date.  The Broker will provide MECON with all proposal forms (where applicable) and closing instructions received from the insured within fourteen (14) days from the inception date of the contract of insurance, unless MECON advises an alternate timeframe in writing.

Where the insured does not require the contract of insurance, the Broker will submit a cancellation closing or advise MECON in writing (by email) within seven (7) days.

The contract of insurance will be the written offer provided by MECON to the Broker as agent for an insured. Any subsequent documents or other conduct, including any counter-offer from the Broker, will have no effect unless agreed and confirmed in writing by MECON.

Hold covered terms may be available in limited circumstances upon written request and is at the sole discretion of MECON.

4. Financial Services Guide (‘FSG’)

If there is no combined FSG / Product Disclosure Statement for retail insurance products provided by MECON, the Broker must issue the relevant FSG on behalf of MECON to the Broker’s client.

5. Insureds

MECON will only directly contact insureds in the following circumstances:

• promoting, marketing and selling its services or products to the general public or to groups of persons who are members of a specific industry, association, profession, club or ethnic community provided that in doing so, it does not target any client of the Broker specifically;
• pursuant to statutory requirements;
• if requested by the insured in writing;
• as required in relation to a claim; or
• if after following reasonable efforts, MECON has been unable to provide the Broker with any of the relevant notices and information required pursuant to statutory requirements.

6. Duty of Disclosure

An insured has a duty to take reasonable care not to make a misrepresentation or has a duty of disclosure pursuant to the Insurance Contracts Act 1984 (Cth) (ICA). The relevant sections of the ICA for general insurance products, are s20B and s21.

The relevant duty is also set out in the PDS, policy wording or insurance documentation associated with the contract of insurance.

7. Credit Terms, Payment of Premium, Fees and Statutory Charges, Short Period Risks

MECON’s Credit Terms are strictly 60 days. Payment must be remitted to MECON within Credit Terms.

The Broker must remit the full payment of Premium to MECON via Electronic Funds Transfer (EFT), accompanied with an electronic remittance advice on a net of commission basis. This remittance will include any applicable agency fees, statutory charges and levies on a gross basis to MECON within its Credit Terms of 60 days of the inception date of the contract of insurance.

If the insured fails to pay the Premium to the Broker and MECON does not receive the full payment of Premium within its credit terms, MECON may cancel the cover pursuant to s60(1)(d) of the ICA.

All collected Premium, applicable fees, statutory charges and levies must be held in a trust account in accordance with statutory provisions.

In its sole discretion, MECON may provide cover for short period risks. This will be confirmed in writing to the Broker by MECON. The cover is conditional upon the Broker confirming in writing to MECON that the insured has paid the Premium to the Broker, within seven (7) days of the date of MECON’s conditional acceptance email.

If MECON does not receive the Broker’s written confirmation confirming its receipt of payment of Premium, MECON may cancel the cover pursuant to s60(1)(d) of the ICA.

Relevant information will be set out in the MECON insurance documentation provided to the Broker.

8. Remuneration

MECON will pay the Broker commission on each base Premium in accordance with the agreed rates.

For the avoidance of doubt, the base Premium is exclusive of statutory charges (including GST and stamp duty), any fire services levy or any other fee.

Any change to the Broker commission will be communicated by MECON providing 30 days’ prior written notice to the Broker.

9. Cancellation of the Contract of Insurance

MECON may cancel the contract of insurance on behalf of the insurer, pursuant to the provisions in the ICA. Subject to the provisions of the contract of insurance, MECON maintains and reserves any other rights under the ICA to cancel the contract of insurance.

MECON must notify the Broker of any intention to either cancel or avoid a contract of insurance.

Non-payment of Premium will be cancelled in accordance with s60 of the ICA, if Premium is not paid in accordance with the provisions of the contract of insurance.

Interim contracts of insurance will be cancelled in accordance with s38 and s60(4)(b) of the ICA.

Instalment contracts of general insurance will be cancelled in accordance with s62 of the ICA.

If a contract of insurance is cancelled following the cooling off period (if applicable), the Premium refund will be made up of two components:

1. a prorated percentage of the net Premium received by MECON; and
2. a prorated percentage of commission earned by the Broker for arranging the contract of insurance.

Agency fees are payable unless the contract of insurance is cancelled within the cooling off period (if applicable) or there is a full-term cancellation.

If Premium is non-refundable as a result of cancellation, this will be disclosed in the PDS, policy wording or insurance documentation associated with the contract of insurance.

10. Claims

The Broker will provide all reasonable assistance to MECON, or a party nominated by MECON or the insurer, in respect of all MECON claims handling and settling services.

In the event of any claims made on a contract of insurance where Premium remains unpaid, the Insurer may deduct the unpaid Premium by reducing any claim payment by the amount of the unpaid Premium (including applicable agency fees, statutory charges and levies).

11. Electronic Communication Disclosure

MECON may be required by law to provide the Broker with written documentation. This includes policy wording, contracts, notices, disclosures, authorisations, declarations, acknowledgements, requests, forms and other insurance documents.

All correspondence will be sent electronically unless the Broker informs MECON it does not consent to electronic communications.

If the Broker has provided its email address to MECON, that email address will be used for all correspondence, unless informed otherwise.

To opt out of electronic communications with MECON at any time, please notify MECON by:

• Telephone: 02 9252 1040
• Email: [email protected]
• Post: PO Box R1789 Royal Exchange NSW 1225

Choosing not to receive electronic correspondence will slow MECON’s service because of the delay sending correspondence by post.

The Broker must comply with any ASIC regulatory guides and any statutory requirements if distributing insurance documentation electronically.

12. Marketing Material

Any marketing material for MECON’s products created or developed by the Broker must be approved by MECON prior to use.

The Broker will not modify or change any marketing material provided by MECON without the prior written consent of MECON.

13. Compliance with Applicable Requirements

The Broker will at all times comply with all statutory requirements, ASIC regulatory guides and codes of conduct affecting the Broker’s business.

14. Indemnity

Each party indemnifies the other, on demand, for all claims, damages, judgments, losses, costs (party/party basis) and expenses to the extent that they are reasonably incurred in connection with any breach by a party of either these T&Cs or statutory requirements.

The indemnity survives the expiry or termination of these T&Cs.

This indemnity does not apply to the extent of an indemnified party’s fraud, negligence or other default.

15. GST

Where GST is payable, it must be calculated and paid in accordance with A New Tax System (Goods and Services Tax) Act 1999 (Cth).

All amounts referred to in these T&Cs are GST exclusive.

16. Recipient Created Tax Invoice (RCTI)

Both parties agree that they are parties to a RCTI Agreement for the purpose of dealing in insurance products and declare that these T&Cs apply to supplies to which a tax invoice relates. MECON may issue tax invoices for the supplies, in which case the Broker will not issue tax invoices for the supplies.

Both parties are registered for GST and will notify the other if that registration ceases.

Both parties agree to comply with the Australian Taxation Office requirements for a valid RCTI, which may be amended from time to time.

17. Target Market Determinations – Distribution Reporting and Significant Dealings

The Broker agrees to distribute the insurance products in accordance with a valid and up to date Target Market Determination (TMD) (where required). The Broker agrees to provide reasonable reporting to MECON to meet the distribution reporting and significant dealings (having regard to ASIC’s guidelines) obligations set out in the TMD for insurance products arranged by the Broker.

MECON will advise the Broker of the reporting obligations by providing 30 days’ prior written notice, unless a variation is required to comply with statutory requirements, where immediate notice will apply. These reporting obligations may change from time to time.

If the Broker provides personal advice to the insured, distribution obligations in the TMD may not be applicable. However, reporting obligations in the TMD for complaints apply in circumstances where personal advice is provided.

18. Records

The Broker will retain all records including correspondence (whether electronic or otherwise) either created by or supplied to the Broker for the purpose of providing financial product advice or dealing with the insurance products under these T&Cs for a minimum of seven years or longer if required by any statutory requirements.

19. Dispute Resolution

The parties will attempt in good faith to negotiate any dispute between them in connection with these T&Cs within 30 days after written notice from a party.

If the parties cannot resolve the dispute by negotiation within 30 days from the date of the original written notice, they will mediate in accordance with the Australian Disputes Centre guidelines for commercial mediation in operation at the time.

This clause does not apply to any urgent court application, including interlocutory relief.

20. Privacy and Confidentiality

Privacy

The Broker, if providing MECON with personal information about individuals, will comply with all relevant obligations under the Privacy Act 1988 (Cth), including having made or making the individual(s) aware that their personal information will be disclosed to MECON and handled in accordance with MECON’s Privacy Policy.

Confidentiality

Subject to section 5 (Insureds), during and after termination of these T&Cs, each party must keep confidential and must not use the other party’s Confidential Information except as necessary to perform under these T&Cs or as required by law.

If a government, regulatory authority or court orders a party to disclose Confidential Information, that party will, to the extent permitted, immediately advise the other party and will disclose only such of the Confidential Information necessary to comply with the order.

Nothing in this section 20 (Privacy and Confidentiality) restricts the use or dissemination of Confidential Information obtained lawfully from a third party.

Each party authorises the other to disclose relevant Confidential Information to insurers, (re)insurers, actuaries, auditors, professional advisors and any related bodies corporate, in each case on a confidential basis and only for the sole purpose necessary to discharge its obligation relevant to dealing in insurance products. It is acknowledged that some of these people could be located outside Australia.

Confidential Information means all information, data, practices and techniques relating to a party, or a related body corporate, customers, competitors, business, operations, strategies, computer systems, marketing systems and intellectual property or other property of which the other party becomes aware in negotiating or performing under these T&Cs.

Confidential Information does not include information that is in the public domain or later comes into the public domain (unless it came into the public domain by a breach of confidentiality).

This section 20 survives termination.

21. Termination and Variation

These T&Cs may be varied by MECON without cause by providing the Broker with 30 days’ prior written notice, unless the variation is to comply with a requirement where immediate notice will apply.

These T&Cs may be terminated without cause by either party by providing 30 days’ written notice to the other or immediately if either party has its AFSL varied, suspended or cancelled.

MECON reserves the right to terminate these T&Cs immediately by providing written notice to the Broker if the Broker is subject to an insolvency event, breaches a condition or engages in serious misconduct including fraudulent activity, or there is a statutory requirement.

As soon as practicable after any termination of these T&Cs and in any event within 60 days, each party must pay all monies owed to the other if any, after taking into account any adjustments required and each party must return at its own expense all hard copy documents including marketing materials supplied by the other party and not access electronic copies.

22. Contact Details

A party will provide notice to the other of any change of address, telephone numbers and email address as soon as practicable after such change.

23. Inconsistency and No Assignment

In the event of any inconsistency between these T&Cs and the PDS, policy wording or insurance documentation associated with the contract of insurance, the PDS, policy wording or insurance documentation will take precedence.

The Broker may not assign its rights or transfer obligations under these T&Cs without the prior written consent of MECON.

24. Intellectual Property

The parties agree that nothing in these T&Cs transfers ownership in, or otherwise grants any rights in, any intellectual property rights of a party.

This clause survives termination.