In a letter to its members, AFA president Deborah Kent said it was leading the work with Treasury, Assistant Treasurer and Small Business Minister Kelly O’Dwyer and other associations to remove a carve-out that excludes direct insurance provided without advice from the LIF.
“What we are concerned about is leaving a carve-out for direct insurance where no advice is provided as that may see institutions target this area with models that fail to bring protection and value to consumers, and is also clearly unfair to advisers where the LIF would apply commission caps and clawback periods,” Ms Kent said in the letter.
Ms Kent also was disappointed by the FSC continuing to call for the carve-out in its submission to Treasury on 24 December 2015, stating that “more consultation is needed to avoid any unintended consequences on direct life insurance distribution models”.
“We see this behaviour from the FSC as unacceptable given the thoroughness of the negotiations and that the Minister has already publicly confirmed that LIF would apply to direct insurance,” she said.
Ms Kent also stated that another area of the LIF draft regulations that the AFA board needs to address is the period of time provided for employed advisers under workplace agreements to be excluded from the framework, to allow those agreements to be honoured with employees.
She argued that this would mean some sales channels of insurers would not be subject to commission caps and clawback until after those existing agreements end.
“We do not support that outcome as it creates an unfair application of LIF with respect to the majority of our members,” Ms Kent said.
Great comments Mark, Margaret and The Patriot.
All advisers have been sold out by the industry associations formed to supposedly represent our views and concerns.
Margaret, the AFA are not asleep at the wheel, they have basically parked the car somewhere off the beaten track and gone on holidays.
Like Mark, I have had a busy time with claims lately, one being lodged 9 months after the event occurred only after my input, as they weren’t even aware they could claim, resulting in not having the bank foreclose on the family home.
I also fear for the tens of thousands of claims each year in the future that will have to go direct to insurance companies to try and sort out their claims, without the help and service of a caring and specialist insurance adviser.
The way the whole LIF process has been handled is a disgrace!
What are the stats? Something like – direct pays out 50% of the time, Advised pays out 90% of the time? Can Risk Adviser check those stats and provide commentary please? This is the stuff that matters to consumers, and should matter to politicians, consumer groups and our Associations.
At a recent meeting, Wayne Handley, Ron Lambert and myself, had with both Brad Fox and Debra Kent, Brad informed us that he thought the Carve Outs of the proposed LIF Reforms were a typo made by treasury. The 3 of us looked at each other and could not believe what we had just heard.
The FSC have framed an argument, and our association, without the support of it’s members, have been diluted in their support of this.
We look forward to getting in front of the ACCC, and having the blow torch turned up on the way the Life Insurance CEO’s and the Executives by the FSC have colluded to have one set of rules to Bank aligned channels, and another set of rules for Independent advisers.
More importantly, what consumer benefits are there on the proposed reform?
As I sit at my desk and go through one of the 12 claims we are settling now, I think to myself, how will clients have claims settled and get advice given when they deal directly with Banks and/or Life Companies, without the assistance of a professional Life Insurance adviser?
Mark Dunsford.
If you AFA clowns haven’t realised that the FSC have duped you on every aspect of the LIF including conning you with 20/20 so that you would agree with 60/20 and a two year clawback, then you are naïve, foolish and incapable of dealing with the FSC. Unless you are complicit with the FSC in the shafting of risk writers? We saw you cower in the corner against the FSC with the LIF, while other citizens took the fight to the FSC, including Senate submissions that made the AFA’s submission look like a children’s drawing. The matter of the direct insurance carve-out was brought to the attention of the AFA by outside parties because the AFA was yet again asleep at the wheel. How about you survey the AFA members using an independent firm and ask the members whether they support the LIF or the remuneration changes. Your Cairns meeting only showed 1% support, but you sold your AFA members up the river to the FSC anyway. You are a disgrace.
are yes the dear old FSC…. how can we have a dislocated set of regulations for the same products??? does not make sense at all. One set of rules for our life insurance industry regardless of provider.