AFG Broker Referral Terms

AFG Broker Referral Terms

Table of contents 1. DEFINITIONS AND INTERPRETATION... 2 2. GRANT OF AGENCY... 3 3. SUB AGENTS... 4 4. GENERAL OBLIGATIONS... 4 5. REMUNERATION... 5 6. TERMINATION OF AGREEMENT... 5 7. CONFIDENTIAL INFORMATION... 6 8. DOCUMENTATION AND INTELLECTUAL PROPERTY... 7 9. INDEMNIFICATION... 7 10. AGENT INSURANCE... 8 11. DISPUTE RESOLUTION... 8 12. WARRANTIES... 9 13. NOTICES... 9 14. VARIATION... 10 15. ASSIGNMENT, TRANSFER AND NOVATION... 10 16. SEVERABILITY AND VALIDITY... 10 17. WAIVER... 10 18. CUMULATIVE RIGHTS... 11 19. GOVERNING LAW AND JURISDICTION... 11 20. CHANGES TO LAW... 11

Date Allianz Australia Insurance Limited of 2 Market Street, Sydney, NSW, 2000 (Allianz). 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions AFG means Australian Finance Group Limited ABN 110066385822 AFG Broker means a broker who is a member authorised representative of AFG who has accepted these terms in accordance with the Allianz Offer. Agreement means the Agreement entered into between the AFG Broker pursuant to the Allianz Offer, which is made up of these terms and any schedules to them. (d) Allianz Offer means the offer made by Allianz as set out in Schedule 3. (e) (f) (g) (h) ASIC means the Australian Securities and Investments Commission. Australian Financial Services Licence means a licence under the Corporations Act 2001(Cth) that authorises a person to carry on a Financial Services business. Confidential Information means all information furnished by one Party to the other Party under or pursuant to the Agreement. Director has the meaning given to it in the Corporations Act 2001(Cth). Financial Service has the meaning given to it in the Corporations Act but does not include any service provided by the Agent for which a licensing exemption applies under Chapter 7 of the Corporations Act 2001 (Cth). (j) GST Act means the A New Tax System (Goods and Services Tax) Act 1999 (Cth). (k) (l) (m) GST has the meaning given to that expression in section 195-1 of the GST Act. Insurance Business means insurance contracts of the classes and types identified in Schedule 1 to these terms for which the Agent has been authorised under the Agreement. Mere Referral Service means: a referral service that is not a Financial Service; or 2

(n) (o) (p) (q) (r) (ii) 1.2 Interpretation an exempt Financial Service within the meaning of Corporations Regulation 7.6.01(ea). Parties means Allianz and the Agent and their respective successors and permitted assigns. Person means any individual, body corporate, partnership or other entity. Premium means the amount payable by an insured to Allianz to acquire or vary Insurance Business and includes any amount payable in relation to stamp duty, fire services levy, GST or other amounts Government taxes, charges or levies. Previous Agreement means the agreement (if any) between Allianz and the Agent in relation to Insurance Business current as at the date of the Agreement. Related Body Corporate means, in relation to a body corporate, a body corporate which is related to it within the meaning of section 50 of the Corporations Act 2001(Cth). In the Agreement, unless inconsistent with the context or subject matter: words used in the singular shall include the plural and vice versa; words used in the masculine gender shall include feminine or neuter genders and vice versa; and headings in the Agreement are only descriptive and do not form part of the Agreement. 2. GRANT OF AGENCY 2.1 Commencement and Term The Agreement is operative from the time the Allianz Offer is accepted and shall continue until terminated in accordance with clause 6 below. Previous Agreements From the date of the Agreement: the Agreement replaces and terminates the Previous Agreement (if any); and the Agent warrants that it has complied with all of its obligations arising pursuant to the Previous Agreement, if any, including but not limited to any accounting and reporting obligations. 2.2 Appointment and authority Subject to the terms of the Agreement, Allianz: appoints the Agent as its agent; and authorises the Agent on its behalf to provide a Mere Referral Service in relation to the classes of Insurance Business set out in Schedule 1. Allianz may amend the authority of the Agent at its discretion by providing written notice to the Agent of that amendment. 2.3 Limit of authority The Agent will not: 3

(d) (e) enter into, vary or cancel any Insurance Business; receive premium for any Insurance Business; do anything as agent of Allianz that it is not expressly authorised to do by the Agreement; assume any obligation on behalf of Allianz except as authorised by the Agreement; provide any Financial Service on behalf of Allianz; or (f) hold itself out as having authority from Allianz except as set out in Schedule 1. 2.4 Legal relationship The legal relationship created by the Agreement between Allianz and the Agent is that of principal and independent contractor, and not that of employer and employee or of partnership. 3. SUB AGENTS 3.1 Appointment of sub-agents The Agent shall not appoint any sub-agent without the written consent of Allianz. 4. GENERAL OBLIGATIONS 4.1 Agent obligations The Agent agrees to: (d) (e) (f) use its best efforts to obtain Insurance Business for the benefit of Allianz; act bona fide and for the benefit of Allianz in carrying out its obligations under the Agreement; and make all reasonable endeavours to assist Allianz to comply with: (ii) its obligations under the Corporations Act 2001 (Cth); any obligations Allianz may have under the General Insurance Code of Practice, and any external dispute resolution facility of which Allianz is a member, where relevant; take all reasonable steps to adequately manage conflicts of interest in relation to the performance of its obligations under the Agreement, whether in relation to Allianz or Insureds. If a conflict of interest arises or is reasonably likely to arise, the Agent must: (ii) (iii) notify Allianz immediately; identify and provide details of the conflict of interest; and work with Allianz to develop mechanisms to appropriately manage the conflict of interest or avoid it where reasonable and document the agreed arrangements; keep proper records in relation to the provision of its services in relation to the Agreement, including but not limited to financial records and preserve those records for not less than seven (7) years from the time that they were created or for such longer period that Allianz may notify to the Agent in writing; and upon Allianz giving the Agent ten (10) Business Days' written notice, permit Allianz, both during the Agreement and after it is terminated, to inspect and 4

4.2 Mutual obligations audit the Agent's records and the processes and procedures used by the Agent in relation to the services provided under the Agreement, at such reasonable time and place that Allianz nominates in writing. Both parties agree to comply with all legislation which relates to Insurance Business, including but not limited to the: (d) (e) Insurance Contracts Act 1984 (Cth); Corporations Act 2001 (Cth); Trade Practices Act 1974 (Cth); Australian Securities and Investments Commission Act 2001 (Cth); and Privacy Act 1988 (Cth). 4.3 Allianz guidelines and manuals The Agent agrees to comply with any guidelines and manuals provided by Allianz to the Agent from time to time in relation to Insurance Business. Allianz may amend the terms of its guidelines and manuals at its discretion but must provide written notice to the Agent before it is required to comply with those amendments. 5. REMUNERATION 5.1 Remuneration The Agent will be remunerated by AFG not Allianz. 5.2 No other remuneration The Agent agrees not to receive or charge any other amount for Insurance Business other than permitted by this clause, without Allianz' written consent. 5.3 Agent s expenses All expenses incurred by the Agent in conducting the Agency are to be borne by the Agent unless otherwise agreed in writing by Allianz. 6. TERMINATION OF AGREEMENT 6.1 Termination The Agreement may be terminated by either Party giving to the other Party thirty (30) days written notice of its intention to terminate the Agreement. Termination occurs at the end of that period. The Agreement may be terminated immediately by either Party giving written notice to the other Party if the other Party: (ii) (iii) commits a material breach of the Agreement which, if capable of remedy, has not been remedied within 14 days after written notice is given to the other Party to do so; ceases to hold relevant licences or authorisations required in connection with the Agreement by relevant legislation; or has any step taken towards its winding up, dissolution or administration, the entry into an arrangement, compromise, composition with or assignment for the benefit of creditors, or the appointment of a receiver, receiver and manager, controller or administrator. 5

The Agreement may be terminated immediately by Allianz giving written notice to the Agent if 6.2 Effect of termination the Agent or any of its Directors (where relevant), employees or subagents engages in conduct in connection with the performance of the Agreement which, in Allianz' reasonable opinion, is fraudulent, dishonest, misleading or deceptive, or likely to bring the name of Allianz or its Related Bodies Corporate into disrepute. Upon termination of the Agreement, the Agent s appointment as an agent of Allianz is automatically revoked and the Agent shall no longer act as the agent of Allianz. Upon termination of the Agreement the Agent shall immediately, if so requested by Allianz: (ii) 6.3 Non-merger revoke the authorisation of any sub-agents; return (at the Agent s cost) all documentation and other physical property supplied by Allianz to the Agent in relation to the performance of the Agreement that is in the Agent s possession or control to Allianz and ensure that any sub-agents do the same. Nothing in this clause operates to discharge either Party from its obligations and duties arising under or in connection with the Agreement prior to the date of termination, or expressly provided by the Agreement to subsist following termination of this Agreement. This clause and those clauses or parts of clauses which by their nature should survive termination of this Agreement, shall survive, including but not limited to Clauses 6.2, 7, 8, 9 and 11. 7. CONFIDENTIAL INFORMATION 7.1 Confidential Information The Parties hereby acknowledge that in performing their respective obligations and responsibilities under the Agreement each will have access to Confidential Information of the other. Each Party agrees: (ii) (iii) only to use Confidential Information of the other Party for the purposes of the Agreement; to receive and maintain all Confidential Information of the other Party in confidence; not to use, directly or indirectly, nor disclose to any other third party any Confidential Information of the other Party without the prior written consent of that Party, except where: (iv) (v) the information is public knowledge (but not being made so because of a breach of the Agreement); the Party has independently created or received the information; 6

(vi) (vii) 7.2 Trade secrets disclosure is required by law or a regulatory body; or disclosure is made to a person who has a need to know the information for the purposes of the Agreement, and on the basis that the person keeps the information confidential. Each Party shall ensure that its Directors (where relevant), employees contractors, agents and other representatives (other than the Agent in the case of Allianz) fully comply with the provisions of this clause. Each Party agrees not to divulge: trade secrets or other similar information about the other Party; or information about the manner in which the other Party conducts its business. 8. DOCUMENTATION AND INTELLECTUAL PROPERTY 8.1 Documentation and intellectual property Allianz is and remains the sole owner of all documentation, other physical property and intellectual property that it at any time supplies to the Agent in relation to the performance of the Agreement. If requested by Allianz, the Agent shall return all such documentation and other physical property that is in the Agent s possession or control, at the Agent's own cost unless otherwise agreed. The Agent shall not do any of the following without Allianz' prior written consent: (ii) (iii) (iv) 9. INDEMNIFICATION 9.1 Agent indemnity use or publish any documentation in relation to the Insurance Business or any other matter covered by the Agreement (including but not limited to marketing material such as brochures, advertisements, articles, editorials and posters, and insurance documents such as proposals, policy wordings, certificates of insurance and certificates of currency) other than that supplied by Allianz or first approved by Allianz in writing; amend documents supplied by Allianz; publish or circulate any advertising material in relation to the Agent s appointment by Allianz; or use or register any part of Allianz' name in the business name of the Agent or any associated entity. The Agent will be liable for and agrees to indemnify Allianz and its Directors, officers, employees, contractors, agents and other representatives and Related Bodies Corporate and hold them harmless against any and all claims, losses, liabilities, costs or expenses (including but not limited to reasonable legal and other costs of defending or settling any claim) arising out of or in connection with: 7

any breach by the Agent of the Agent s obligations or responsibilities under the Agreement or inaccuracy of any of the representations and/or warranties made by the Agent in the Agreement; the default, negligence, bad faith, or breach of any provision of any applicable law by the Agent or any of its officers, employees, contractors, agents and other representatives in carrying out the Agent s obligations under the Agreement; or any act taken by the Agent or any of its officers, employees, contractors, agents and other representatives outside the scope of the authority given by Allianz under the Agreement. The benefit of the indemnity provided above to Allianz' Directors, officers, employees, contractors, agents and other representatives and Related Bodies Corporate, is held on trust by Allianz for each of them. 10. AGENT INSURANCE 10.1 Agent insurance The Agent agrees to: keep current, at its cost, with an insurer approved by Allianz and in terms approved by Allianz: (ii) a professional indemnity insurance policy providing cover in a sum of not less than $2,000,000; and fidelity guarantee insurance for a sum not less than $50,000; and provide written evidence of the currency of such insurance policies to Allianz whenever required by Allianz. 11. DISPUTE RESOLUTION 11.1 Precondition to litigation and arbitration Each Party agrees not to commence court proceedings (except proceedings seeking interlocutory relief) or arbitration in relation to any dispute relating to the Agreement unless it has first attempted to resolve the dispute as set out in this clause. 11.2 Dispute resolution procedure The dispute resolution procedure is as follows: the Party claiming that a dispute has arisen in relation to the Agreement shall give the other Party written notice specifying the nature of the dispute; within 14 days of receipt of that notice, the Parties must hold discussions and negotiations in good faith in order to attempt to amicably resolve the dispute; and in the event that the Parties cannot resolve the dispute through discussions and negotiations, the Parties shall refer the dispute to an independent mediator as agreed or, failing agreement, as appointed by the Chief Executive Officer of LEADR and will use their best endeavours to resolve the dispute in mediation. 11.3 No prejudice to right of termination Nothing in this clause limits the rights each Party has to terminate the Agreement. 8

12. WARRANTIES 12.1 No Australian Financial Services Licence The Agent warrants that: it does not hold an Australian Financial Services Licence; and it does not intend to apply for an Australian Financial Services Licence. 12.2 Training and competency The Agent warrants that: it meets the training and competency requirements (if any) set by Allianz in writing with respect to the services the subject of the authority contained in the Agreement; and it will comply with further training and competency requirements (if any) set by Allianz in writing from time to time with respect to those services. 12.3 Banning orders or disqualifications The Agent warrants that ASIC has not made: a banning order prohibiting the provision of services authorised under the Agreement; or a disqualification order relating to the provision of services authorised under the Agreement; with respect to the Agent or any of its Directors (where relevant), officers, employees, agents or other representatives. 12.4 ASIC investigation The Agent warrants that: 12.5 General neither it nor any of its Directors (where relevant) or employees have been the subject of any investigation or enforcement initiative by ASIC; and in the event that it becomes aware of any likely or actual investigation or enforcement initiative by ASIC, it will immediately inform Allianz. The Agent warrants that it: 13. NOTICES 13.1 Notices is not bankrupt or insolvent (as relevant); and is not the subject of any dispute or legal proceeding which could cause material prejudice to Allianz, other than as disclosed in writing to Allianz. Any written notice to be given under the Agreement can only be given by one of the following methods: hand delivery during normal office hours; e-mail, in which case the notice is deemed to have been received at the time the message enters the recipient's server, except if the notice is sent out of normal business hours or on a day other than a business day, in which case the notice is deemed to have been given on the next business day; 9

(d) facsimile, in which case the notice is deemed to have been received at the time transmission is completed, except if the notice is sent out of normal business hours or on a day other than a business day, in which case the notice is deemed to have been given on the next business day; prepaid post, in which case the notice is deemed to have been received three business days after the date of posting. 13.2 Address for notices Notices must be sent to the address for notices as contained in the Previous Agreement unless otherwise notified by the Agent in writing.. 14. VARIATION 14.1 Variation of Agreement The Agreement may be varied in writing with the written consent of both Parties. 15. ASSIGNMENT, TRANSFER AND NOVATION The Agreement and the Agency may be assigned, transferred or novated by Allianz at its discretion but cannot be assigned, transferred or novated by the Agent without the prior written consent of Allianz. 16. SEVERABILITY AND VALIDITY 16.1 Severability and validity In the event that any court of competent jurisdiction declares invalid any provision of the Agreement, such invalidity shall have no effect on the other provisions of the Agreement which shall remain valid and binding and in full force and effect and to that end the provisions of the Agreement shall be considered severable. 17. WAIVER 17.1 Form of waiver A waiver of a provision of the Agreement or a right or remedy arising under the Agreement must be in writing and signed by the Party granting the waiver. 17.2 Single or partial exercise of right A single or partial exercise of a right under the Agreement does not preclude a further exercise of that right or the exercise of another right. 17.3 Failure or delay in exercising a right Failure by a Party to exercise a right under the Agreement or delay in exercising that right does not prevent its exercise or operate as a waiver. 17.4 Waiver specific A waiver is only effective in the specific instance and for the specific purpose for which it is given. 10

18. CUMULATIVE RIGHTS The rights and remedies of a Party under the Agreement do not exclude any other right or remedy provided by law. 19. GOVERNING LAW AND JURISDICTION 19.1 Governing law The Agreement shall be governed by the law of New South Wales. 19.2 Jurisdiction Subject to clause 11, the Parties submit to the non-exclusive jurisdiction of courts exercising jurisdiction in the State or Territory referred to in clause 19.1 above for the purposes of resolving any dispute or determining any matter or issue arising out of or in relation to the Agreement. 20. CHANGES TO LAW If any statute or regulation relevant to the construction of the Agreement is amended or replaced, the Agreement shall be read as though the amended or new statute or regulation were incorporated in it. If this produces any ambiguity, the Agreement shall be construed so as to most nearly give effect to the intentions of the Parties at the time it was executed. 11

Schedule 1 Authority 1.Mere Referral Service Insurance Business The Agent may provide a Mere Referral Service in relation to Insurance Business in the following classes as agent of Allianz: Class of Insurance Business Building Contents Landlords Motor.. 12

Schedule 2 Address for notices Allianz: Company Secretary Allianz Centre Level 12, 2 Market Street, Sydney New South Wales Agent The Agent s address for notices will be the same as it was in the Previous Agreement or if the Agent has not had a Previous Agreement it will be the latest address which AFG has for the Agent. 13

New Allianz Referrer Arrangement. Schedule 3 Dear valued AFG member, We're pleased to announce some exciting changes to the general insurance arrangements for you. Following discussions between AFG and Allianz Australia Insurance Limited (Allianz), a fee based referrer model has been developed for AFG members referring their clients to Allianz. You will receive a flat fee of $45.00 plus GST per risk for all Allianz general insurance policies sold. New AFG General Insurance process and payment structure Effective 31 August 2009, Allianz is offering you the opportunity to earn $45.00 per general insurance product that your client purchases as a result of a referral from you. Each month, you will receive $45.00 for every Allianz general insurance product sold through your referral. This will be paid in line with your normal commission payment arrangements.. That's $45.00 for every home building, contents (personal effects excluded) and motor vehicle insurance risk accepted by Allianz. And we are already obtaining exceptional conversion rates of over 50%. So, if your customer purchases a building, contents and a motor policy, you will receive $135 paid to you in the following month. The customer offer 1. For customers purchasing a new property: Up to 90 days free cover up to settlement 2. For customers refinancing an existing property: 10% discount How to... It's as easy as 1-2-3 Referrer Card attachment 1. Write your FLEX ID on the attached referrer card (to obtain hard copy flyers email: insuranceflyer@allianz.com.au, with your details e.g. name, address, how many required). Your customer will be asked to provide this by the Allianz consultant and is how we identify who the sale belongs to. 14

Your FLEX ID can be located in FLEX under Tools > User Preferences in the view which appears it is recorded in the Member Id field in the left hand column. 2. Spot the referral and hand the attached referral card to your client recommending that they contact Allianz for a competitive quote. 3. Your client calls Allianz or you transfer them - on 1300 360 574 - and Allianz quotes and binds the policy for you. What do I need to do? HOW TO ENTER INTO THE NEW ARRANGEMENT WITH ALLIANZ Simply follow these 2 steps: Step 1 - read the attached new Allianz AFG Broker Referral Terms that will apply if you agree to the new arrangement (the Referral Terms). We recommend that you take the time to familiarise yourself with the contents of the terms and seek advice where appropriate before deciding. Step 2 - If you are an AFG broker as defined in the Referral Terms and are happy with them, you agree to Allianz' offer to enter into a new referral agreement with Allianz Australia Insurance Limited of 2 Market Street, Sydney, NSW, 2000 (Allianz) on the Referral Terms by making a referral on or after 31 August 2009 following the referral process in the Referral Terms any time. There is no need to sign anything. Referrer Agreement attachment Remember a referral is meant to be a limited role and no advice can be provided by you customers about the insurance or you will breach the Corporations Act Under the Referral Terms with Allianz, these general insurance products are being distributed on a "Spot and Refer" basis only. As an AFG Broker, what this means for you is that, under the Corporations Act (2001) you cannot provide your customers with advice about any of the Allianz general insurance products. You are only able to refer the customer to us and supply factual information to your customers about the insurance. 15

Factual information includes the features of the product, as described in the Product Disclosure Statement (PDS). For example, "For each claim free period of insurance the insured will accumulate a discount off their motor vehicle insurance premium up to a maximum amount". You cannot provide any advice or help them make a decision. Advice involves a subjective recommendation or opinion about a product rather than objectively ascertainable factual, statement. For example, "If you own a car, it would be a good idea for you to purchase comprehensive motor vehicle insurance or "this car insurance is right for your needs." It is up to your customers to decide whether the products are right for or of value to them. For any product queries, refer your customers to Allianz on the 1300 number. You must tell them that you don't provide any advice on or recommend the products so they are not confused. Further information on your obligations under the FRSA guidelines is available on the Australian Federal Government ComLaw website at http://www.comlaw.gov.au NOTICE OF TERMINATION OF AUTHORITY AND AGREEMENT TO AFG BROKERS WITH CURRENT DISTRIBUTION AGREEMENT WITH ALLIANZ If you choose to enter into the new referrer agreement and you have an existing Distribution agreement with Allianz, then by entering into the new referrer agreement you agree to terminate the Distribution agreement. If you do not wish to enter into the new referrer agreement, Allianz gives you notice that your authority to arrange and refer insurance business pursuant to clause 2.2 of the Distribution agreement is withdrawn with effect from 31 August 2009 and also gives you 180 days notice of its intention to terminate the Distribution agreement in accordance with the Distribution Agreement. Important information on Commission for brokers with an existing agreement with Allianz By reason of the new arrangement the authority under any current Distribution agreement between Allianz and an AFG broker is being withdrawn from 31 August 2009. Any referrals made after that date will be on the terms of the new arrangement. See the Allianz notice attached for details. AFG will continue to pay commission on any renewal business that your customers have taken out through the existing Distribution agreement prior to 31 August 2009 until the policy is cancelled or not renewed. Need assistance? Should you have any queries please contact your AFG BDM, or Mike Gambell at Allianz on 0405 157 019. 16