AFIA submission on CSLR special levy

On 29 August 2025, AFIA supports the Compensation Scheme of Last Resort (CSLR) as a vital mechanism to ensure consumers receive compensation for unpaid AFCA determinations but stresses that its funding model must be fair, sustainable, and aligned with policy intent. AFIA opposes imposing special levies on banks, non-bank lenders, and insurers to cover losses arising from managed investment scheme (MIS) failures, recommending instead that MIS responsible entities bear these costs or that the Government contribute to the shortfall. The submission calls for broader CSLR reforms, including expanding coverage to MISs if losses continue, reducing administrative costs, targeting lower-income consumers, and improving regulatory oversight of MISs and financial advice businesses. AFIA emphasizes that before any special levy is applied, industry needs certainty that the CSLR will be restructured to prevent recurring ad hoc levies and ensure long-term sustainability.

View the PDF here.