Extract From ASIC Website: QFS 35 Update (14th March
2005)
Frequently Asked Questions About Financial Services Regulation
In general, if you are a third party warranty provider you will need to hold an
AFS licence regardless of how you structure your particular business. Following
are two common structures used by third party warranty providers.
Distribution Of Extended Warranties Through Car Dealers
This is where a warranty provider uses car dealers to distribute extended
warranties to customers. In these circumstances, it is the warranty provider,
and not the car dealer, that issues the warranty. The car dealer is only an
intermediary that distributes extended warranties for the warranty provider. In
general, the warranty provider will therefore need to hold an AFS licence
because it is issuing financial products, and the car dealer will need to be an
authorised representative of the warranty provider.
Administration Of Certain Extended Warranty Programs
This is where a third party warranty provider provides an extended warranty
'package' to car dealerships, under which the dealer will issue extended
warranties to its customers and the third party warranty provider will
indemnify, or otherwise cover, the dealer for any losses or liabilities under
the extended warranties.
The third party provider sometimes also provides claims handling and
administrative services. In these circumstances, two products are being issued,
i.e. the car dealer issues an extended warranty to the customer, and the third
party warranty provider issues a separate financial product to the car dealer
through which the car dealer manages financial risk. The third party warranty
provider will therefore need to hold an AFS licence to provide financial
services in relation to the product (i.e. a facility for managing financial
risk) it is issuing to the car dealer.
 For more information, see ASIC's Financial Services Regulation
FAQ
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