The Life Insurance Customer Group (LICG), in a letter to the FSC’s chief executive Sally Loane – provided to Risk Adviser’s sister publication ifa – slammed the FSC- supported Life Insurance Framework (LIF) reforms and questioned the Life Insurance Code of Practice, asking who would develop, monitor and enforce it.
“Our reputation has become further tainted because of the unsubstantiated allegations of churn the FSC has made against advisers,” the LICG said in its open letter to the FSC.
“The future viability of our advice businesses is threatened because of the recommendations the FSC has made to government to make unilateral changes to remuneration arrangements for advisers to restrict our capacity to earn and retain earnings. Because of this, we have become very interested in all matters relating to the values and behaviours of the FSC.
“We question the double standards of the management of the FSC,” the letter said.
The LICG also stated that the FSC has failed in its obligation to monitor its code and “a culture in the FSC that tolerates unethical behaviour”.
The LICG was formed last year to provide life insurance advisers who represent the customer and small business community with a voice in the LIF debate.
Currently the LICG has more than 2,300 signatories to its online petition, which strongly disagrees with the LIF in its current form.
The LIF is a complex issue that has implications for many stakeholders, foremost the consumer. The LICG said, however, that it is consumers who under the FSC-supported proposals will be worse off.
“The LICG is urging the FSC to adopt a position that will place the interests of the consumer above self-interest. The LICG has repeatedly called on the FSC for evidence to back up claims that consumers will benefit from the proposals. To date the FSC has not responded with a reasoned reply,” an LICG spokesperson said.
