Higher premiums, compliance hurdles and administration are making life difficult for insurance advisers, who are increasingly turning to their provider relationship managers for help to navigate product offerings.
Confusion around new rules for claims handling – and misleading press coverage – has led many advisers to believe they need to apply for a new AFS licence. Association heads have confirmed Treasury is set to include an exemption for the "vast majority" of advisers.
Shadow finance minister Stephen Jones said proving that a commission-based model can function without conflicts is an “enormous challenge”. While open to the findings of the 2021 insurance review, he made it clear the ALP has every intention of getting rid of commissions holus-bolus if elected in 2022.
APRA has brought forward its suite of changes designed to save the insurance industry after seeing another $1.4B loss since December 2019. Capital penalties will now apply for income protection policies that don’t meet its new sustainability standards, which could force risk advisers to rethink their approach.
The architect of the 2015 Life Insurance Review said the government’s failure to heed his warning on adviser remuneration has left riskies “unable” to service smaller clients. Most insurance is through super anyway, ASIC’s deputy chair responded.
The Life Insurance Framework was too focussed on remuneration and missed more pressing issues vital to the industry, say the associations, who have challenged ASIC to take a broader view in its scheduled 2021 review.
The Senator spoke of the growing challenge soaring mental health claims are presenting to the insurance industry, and said the government is “open” to looking at treatment and prevention funding in lieu of large lump sum payments.