Target Market Determination – Personal Pleasurecraft

Publication date: 5 October 2021

Important information

This Target Market Determination (TMD) is effective from 5 October 2021 and relates to the Sunderland Marine Pleasurecraft Insurance Product Disclosure Statement (PDS) and policy wording.  It is required under section 994B of the Corporations Act 2001 (Cth) and has been prepared by the product issuer The North of England Protecting and Indemnity Association Limited (trading as Sunderland Marine) AFSL 507074 ABN 33 624 528 123 (Sunderland Marine; we; the Issuer).

The TMD is designed to assist customers, distributors and Sunderland Marine staff to understand who this product has been designed for and who it is not suitable for. The TMD identifies triggers for Sunderland Marine to review the target market and sets out the conditions and restrictions on distribution of the product described below. It also sets out review triggers and reporting obligations of Sunderland Marine’s distributors.

This document is not a Product Disclosure Statement (PDS) and is not a summary of the product features or terms of the product. It does not form part of your policy.  To ensure you understand this TMD, please read your policy, the PDS (and any Supplementary PDS issued from time to time) and any other document that we tell you forms part of your policy.

This document does not take into account any person’s individual objectives, financial situation or needs and is not intended to constitute personal advice. Persons interested in acquiring this product should carefully read the PDS before deciding whether to purchase this product.

This TMD is effective from the date of publication until its replacement or withdrawal.

Where a word is capitalised in this TMD and not otherwise defined, the definition of the word can be found in the policy wording/PDS.

Target Market Determination

1. Details

Product name Pleasurecraft Insurance
Publication date of TMD 5 October 2021
Initial review date 5 September 2022
Frequency of subsequent Product reviews At least every 24 months

 2. Product target market

What is the Product?

The Product is Sunderland Marine’s Pleasurecraft Insurance policy.  Any cover under the policy is subject to the terms, conditions, limitations and exclusions set out in the policy.  In order to determine if this insurance coverage meets the customer’s needs, the PDS and the policy must be read in their entirety.

Key covers/attributes

The key attributes of the product are as follows:

Name of benefit Description Up to
Loss, Damage or Theft
  • Accidental loss or damage to the pleasurecraft;
  • Theft of the pleasurecraft; and
  • Malicious damage to the pleasurecraft.
Agreed value with a separate agreed value for:

  • hull, machinery and equipment;
  • dinghy or tender;
  • trailer; and
  • special equipment.
Legal Liability Legal liability to pay compensation to other people for personal injury or death, or property damage arising out of your ownership or operation of the pleasurecraft. The amount shown in the Policy Schedule.
Salvage charges Reasonable expenses incurred in salvaging the pleasurecraft. Reasonable expenses up to but not exceeding the agreed value.
Expenses to avoid or minimise loss Reasonable expenses incurred to avoid or minimise loss or damage to the pleasurecraft. Reasonable expenses up to but not exceeding the agreed value.
Wreck removal expenses Costs and expenses you are obliged to incur to mark, remove or destroy the wreck following a local, state or federal wreck removal order or in circumstances where the insurer deems the wreck to be a hazard to navigation. N/A

Eligibility Criteria

The following eligibility criteria apply to this Product:

  • Existing Sunderland Marine client in respect of the Product or another class of cover; and
  • Owner and operator of a pleasurecraft vessel for personal, recreational or domestic purposes.

Target Market for the Product

The Product is designed for owners of personal pleasurecraft vessels who:

  • Are an Australian resident;
  • Own and operate a pleasurecraft vessel for personal, recreational or domestic purposes, and/or allow other members of their household to do so;
  • Operate their pleasurecraft within Australian waters;
  • Store or moors their pleasurecraft in an appropriate secure and maintained location;
  • Have an appropriate licence to use their vessel;
  • Wish to mitigate their financial loss in relation to accidental damage to their pleasurecraft and equipment or accessories;
  • Wish to mitigate their third party liability for costs that they are legally responsible for in connection to property damage or other loss their pleasurecraft has caused to other persons or property in the specified circumstances detailed in the policy;
  • Comply with their vessel’s build plate and relevant laws and regulations;
  • Take reasonable steps to maintain their vessel in a proper state of repair, condition and seaworthiness; and
  • Take reasonable steps to protect their vessel from loss or damage.

Customers the Product was not designed for

The Product is not designed for someone who:

  • Is an individual living outside Australia;
  • Uses their vessel for business or commercial purposes;
  • Uses their pleasurecraft as their permanent living accommodation;
  • Is currently undertaking major hull repair, alteration or refurbishment of their vessel; and/or
  • Wants cover for loss or damage caused by normal wear and tear or gradual deterioration.

Customers’ likely objectives, financial situation and needs

Customers’ likely objectives are to mitigate their financial exposure arising from the loss of or damage to their personal pleasurecraft as well as liability to third parties connected with its operation.

As the Product relates to personal pleasurecraft only, customers will be funding premium payments from income not connected with the operation of the pleasurecraft.  Customers should ensure they are comfortable with:

  • The application of excesses in the event of claims made;
  • The level of the sum(s) insured;
  • The schedule of premium payments; and
  • The application of exclusions in respect of certain events or elements referred to in the PDS and the Product policy wording.

3. Conditions/restrictions on Product distribution

Condition/restriction Description
Method of distribution The Product can only be purchased through an insurance broker or intermediary appointed by customers to act on their behalf, and there is currently one broker that places cover under the Product with Sunderland Marine.

The distribution method consists of a proposal form and email submission via an insurance broker or intermediary or directly to Sunderland Marine.

Underwriting criteria In deciding whether to offer cover under the Product, we will consider various underwriting criteria including loss history and the level of benefits for which cover is sought.
Promotional material   The Product is currently distributed through a sole distributor who is contractually required to seek our approval of any promotional material.
Distribution in accordance with TMD The Product can only be distributed to a person in accordance with these conditions:

  • It is reasonable to conclude the person is in the target market;
  • The person is eligible for the Product in accordance with underwriting acceptance criteria. The Issuer’s underwriting criteria and procedures is responsible for this process; and
  • Cover may only be issued by personnel who have received the required training and hold the required authorisations.
Restrictions The Product must not be distributed by a person unless that person meets all the following criteria:

  • Holds all applicable regulatory licences and permissions;
  • Specialises in or have appropriate knowledge of marine insurance, in particular marine covers; and
  • Is party to a broker agreement with Sunderland Marine

Sunderland Marine maintains a register of approved brokers we deal with who meet these criteria.

Why the Product is consistent with the target market

Customers who obtain the Product in accordance with the distribution conditions set out above are likely to be in the target market for the Product because:

  • They own a personal pleasurecraft vessel;
  • The Product provides protection sought by those owners, being protection for loss, damage and legal liability associated with ownership and operation of the pleasurecraft vessel; and
  • They have independently appointed the distributor referred to in the table above on the basis that the distributor specialises in or otherwise has appropriate knowledge of the distribution of marine insurance to act on their behalf in order to purchase the Product.

4. Product Review

Periods of review The initial review of this TMD will occur no later than 12 months from the date this TMD is first published, or within 10 business days of an event or circumstance (Review Trigger) occurring that would reasonably suggest that the TMD is no longer appropriate.

This TMD will then be reviewed at least every 24 months.

Review Triggers Any material change to the Product, including a change to the PDS.
Changes to relevant laws, regulatory guidance or industry codes.
Any determination or feedback from regulators, the Australian Financial Complaints Authority, a court or a tribunal suggesting that the target market may no longer be appropriate (including the use of product intervention powers).
The nature of feedback regarding the Product, including whether complaints have increased significantly from consumers or distributors.
Distribution or purchasing of the Product in a manner significantly inconsistent with the TMD/occurrence of a significant dealing.
Adverse trends in policy and claims data indicating the Product is not performing as expected by the customer.  This may include trends such as significantly reduced uptake in the product, a significant increase in midterm cancellations and/or a significant increase in declined claims.
Changes to Product pricing.
External events such as adverse regulatory or media coverage.

Review triggers are events that suggest the TMD may no longer be appropriate and may trigger a review prior to any periodic review as set out above.  The review triggers for this product are set out in the table above.

To determine whether a trigger has occurred, we will collect and review the following information:

  • Claim ratios;
  • Number, nature and magnitude of paid, denied and withdrawn claims;
  • Number of policies sold, including penetration rates;
  • Policy lapse or cancellation rates;
  • Average claim duration; and
  • Information collected from our distributors under section 5 of this TMD.

5. Reporting obligations

Sunderland Marine’s third party distributors must report the following information to the contact details provided in section 6 below in order to ascertain whether or not the TMD remains appropriate to assist us in ensuring our product is and continues to be suitable for our customers.

Distributor reporting obligations

Type of report Description Reporting period
Complaints The number of complaints received regarding the Product during the reporting period and the nature and details of the complaints. Complaint is defined in the Australian Securities and Investments Commission (ASIC) Regulatory Guide RG 271.

We may request further information about any complaints reported to us to enable us to establish any potential impact (if any) on the suitability, design and distribution of the Product.

Within five business days of you receiving a complaint
Significant dealings A significant dealing in the Product which is not consistent with this TMD must be notified to ASIC.

What amounts to a “significant dealing” will be determined by the circumstances of each case but generally regard should be had to:

  • the proportion of consumers purchasing the product who are not in the target market;
  • the actual or potential harm to those consumers including any financial loss;
  • the nature and extent of the inconsistency of distribution with the TMD;
  • the proportion of gross income or premium obtained from the product in respect of consumers who are not in the target market acquiring the product; and
  • current ASIC guidelines when determining what may constitute a significant dealing.

If in doubt, distributors must report the dealing to us, so that we can undertake the necessary assessments. The report must include:

  • Date(s) of the significant dealing;
  • Description of the significant dealing;
  • Why the dealing is considered significant;
  • How the significant dealing was identified;
  • What steps, if any, have been taken in relation to persons affected by the significant dealing; and
  • Steps which have been, or will be, taken to ensure that the significant dealing does not occur again.
As soon as practicable and within 10 business days of becoming aware of the significant dealing.
Breaches Any breach of your legal, regulatory, conduct or contractual obligations in respect of the distribution of the Product Within three business days of you becoming aware of the breach
Sales information Adverse trends in policy and claims data indicating the Product is not performing as expected by the customer.  This may include trends such as significantly reduced uptake in the product, a significant increase in midterm cancellations and/or a significant increase in declined claims. In accordance with existing contractual arrangements or within 30 business days of a request

 6. Contact us

The North of England Protecting and Indemnity Association Limited t/a Sunderland Marine

ABN 33 624 528 123 AFS Licence No. 507074

19 Agnes Street , Jolimont VIC 3002

Telephone: 03 9650 6288 | Fax: 0396506396

Email: australia@sunderlandmarine.com

 

This content is not intended to constitute advice (professional or otherwise) or recommendations upon which a reader may rely.  Sunderland Marine makes no warranty or guarantee about the accuracy, completeness, or adequacy of the content.  Readers relying on any content do so at their own risk.  It is the responsibility of the reader to evaluate the quality and accuracy of the content. Reference in this content (if any) to any specific commercial product, process, or service, and links from this content to other third party websites, do not constitute or imply an endorsement or recommendation by Sunderland Marine and shall not be used for advertising or service/product endorsement purposes.