Lamda Premium Funding Pty Ltd - Personal Lines Premium Funding Plan - Target Market Determination
This target market determination (TMD) is designed to help you understand the intended target market for the Lamda Premium Funding Pty Ltd’s Personal Lines Premium Funding Plan (product). This TMD sets out the types of people this product might suit, information about distribution conditions and how we review this TMD to ensure it remains appropriate.
The product is offered by Lamda Premium Funding Pty Ltd ACN 652 743 452 (referred to in this document as we, us or our). Please read the Premium Funding Plan Offer and Terms and Conditions for full details and terms and conditions of the product.
About the product
The product is a fixed interest rate loan product that provides finance to customers for premiums for insurance taken out for personal, domestic, or household purposes.
The following key attributes of the product affect whether the product is likely to be suitable for the objectives, financial situations and needs of the target market:
- Loan is repayable in equal instalments over the term of the loan, usually a policy period of 12 months.
- Interest is charged at a fixed rate, and calculated on a simple basis.
- Available for individual and strata corporation customers who wish to finance premiums for policies for domestic, personal or household use, including:
- Home and contents insurance;
- Motor vehicle insurance;
- Overseas household removals insurance;
- Sickness and accident insurance;
- Travel insurance; and
- Strata residential insurance.
- As security for the loan in the event of default, the borrower assigns to us the right to cancel and enforce the policy, and the right to premium refunds and claims proceeds.
- The right to recover secured money from borrowers is limited to the borrowers’ obligation to pay instalments by the due date.
- If we become entitled to the payment of any amount from an insurer on account of unused premium, we will not have a right of recourse against the borrower in the event of non-payment by the insurer.
Target market
This product is designed for individuals and strata corporations who do not want to make an upfront payment for their insurance premiums for their personal lines policies, and wish to obtain finance to spread the expense over the term of the policy without being required to provide assets as security for the loan, or a guarantee (the likely objectives, financial situation and needs).
We have determined that the product is likely to be consistent with the likely objectives, financial situation and needs because:
- The product will finance the premium of a range of personal lines policies;
- The product allows for the customer’s total insurance premium to be financed in one upfront payment to the customer’s broker or the insurer, and to repay the loan in equal monthly instalments over the course of the policy period; and
- In the event of default, outstanding loan repayments are paid using premium refunds and claims proceeds that the customer has assigned as security for the loan;
The below table describes the types of customers who form the target market for the product, as well as the customers who fall outside the target market.
Suitable for:
- Customers who wish to pay insurance premiums in monthly instalments.
- Customers who wish to finance insurance policies with policy periods of 12 months.
- Customers who are either an individual or strata corporation.
- Customers who are acquiring insurance that is to be used wholly or predominantly for domestic, personal or household use.
- Customers who are prepared to assign their rights under the policy to us as security for the loan.
Unsuitable for:
- Customers who wish to pay their instalment premium as a lump sum.
- Customers who wish to finance any insurance policy that is wholly or predominantly for commercial use.
- Strata corporations who wish to finance insurance where the total interest, fees and charges payable exceeds $500,000.
- Customers who wish to finance an insurance policy that is not cancellable, or has significant minimum premiums that apply.
Distribution conditions
This product is designed to be distributed by our exclusive agent Midas Insurance Brokers Pty Ltd ABN 40 006 483 174, AFSL Number 247 275 (Midas) via its appointed representatives at Midas customer service centres or by contacting (03) 3 9334 2511.
Midas can only distribute our product through representatives that have received adequate training from us and can only transact for the loan on behalf of their existing clients through in-person transactions, telephone calls and other correspondence.
Representatives will be trained about who is in the target market and our application form will require customers to confirm whether they are an individual or strata corporation, and the type of policy they wish to finance. This will be assessed by Midas as part of the application assessment process, and customers will only be able to only obtain the product if they’re an individual or strata corporation, and acquiring a personal lines insurance policy.
The above distribution conditions make it likely that the product will only be distributed to customers that fall within the target market described earlier in this TMD because:
- Midas and its representatives have knowledge of the terms and conditions of the product; and
- the sales processes are designed to identify customers who fall inside the target market and/or to provide customers with information about the product in order to assess whether the product is suitable for them.
Reviewing this TMD
We will review this TMD at least every two years, starting from the effective date of this TMD.
We will also review this TMD if any of the following occur (each being a ‘review trigger’):
- Material changes or updates to our product;
- Material changes to how we distribute the product, including in relation to acceptance criteria applied in the application process;
- Systemic complaints from customers, or a pattern of feedback from our employees or representatives, about a particular issue relating to the design or distribution of the product;
- Significant changes identified in key metrics such as average premiums financed, and default and cancellation rates; or
- Significant dealing in the product has occurred that is not consistent with this TMD.
We will review this TMD within 10 business days of the occurrence of a review trigger.
Reporting
Midas will report to us in writing within 24 hours of receiving any complaint in relation to the product. It will also record all complaints received about the product and this will be reported to us in writing every quarter. This report will set out the number of complaints received in the most recent reporting period, and the nature of those complaints, and must be provided to us within 10 business days of the end of the most recent reporting period.
Additionally, Midas will provide us with quarterly and incident-based reports on key metrics related to the review triggers described earlier in this TMD. These reports will include data regarding the number and average value of loans entered into, and the number of defaults in the preceding reporting period and must be provided to us in writing within 10 business days of the end of the most recent reporting period.
We will also prepare our own quarterly reports examining certain key metrics related to the review triggers described earlier in this TMD, including volume of loans and complaints, and default data.
If Midas becomes aware of a significant dealing in the product that is not consistent with this TMD, they must report it to us in writing within 10 business days.
