Labor responded to the introduction of LIF legislation in March by saying that, while it will help consumer outcomes, the bill is “not perfect”.
“It is my view that although these changes are worthy of our support, we should consider them as a step in the right direction and not the arrival at a final destination,” said shadow minister for financial services and superannuation Jim Chalmers.
“We strongly believe that the new framework must be monitored following implementation to establish whether it is working, or whether more needs to be done.”
FPA chief executive Dante De Gori said that if Labor wins the election and there is a change of government, then the party will want to look at the LIF from its own perspective.
“[Labor] are on record saying that they don’t believe it goes far enough,” Mr De Gori said.
“The remuneration structure changes that the Life Insurance Framework [proposes] are not strong enough, and this is something the industry should be aware of, but a Labor government will probably be looking at a process of looking to eliminate all insurance commissions, if not drastically reduce them further than what’s been proposed.”
AFA president Deborah Kent said that the LIF reforms had bipartisan support prior to the election, but Labor may decide to revise the reforms if it wins.
“We know that Labor was supportive of the reforms, but they did indicate that they didn’t go far enough, so we would have a concern around whether Labor would actually review the reforms, and it may not be as palatable as the current reforms that we’ve got at the moment,” Ms Kent said.
The Senate Economics Legislation Committee recommended in March that the LIF legislation should be passed without any changes, saying it believes “the bill contains provisions designed to ensure that consumers can access unbiased and appropriate advice” on life insurance.
“This bill effectively addresses unnecessary churning and will ensure that ASIC has greater regulatory oversight over the industry,” the report said.
We could also ask what the members of the FSC, pushing the LIF agenda believe are the benefits to consumers? I doubt there will be a response. The FSC speak it tends to use politispeak (politicians calling something by another name to reduce its impact; to make it misleading), such as ‘designed to improve the quality of advice’, ‘designed to address key issues’ & ‘better align interests across the life insurance sector’. I haven’t read anything from the FSC about why a consumer will benefit? Will they pay less, the same or more for advice? Will consumers be able to trust direct channels more post LIF? Will premiums reduce? I won’t hold my breath.
Love to hear Jim Chalmers explain exactly how LIF will ‘will help consumer outcomes’. Perhaps he could ask the FSC to explain although they also seem to be a bit light on for detail when it comes to explaining the consumer’s benefits of LIF?
I am so sick of the AFA’s excuses. You negotiated a deal with the FSC that will have catastrophic results for independent risk advisers and for customers who cant afford fees to access independent risk advisers. You the AFA did this without the support or backing of your members.
You the AFA are doing nothing to take up the fight and show the blatant cartel behaviour of the FSC.
The FSC have no adequate data to have justified the LIF and are clearly out to increase profits and reduce competition and you the AFA are letting them do it.
There is not one consumer benefit in the proposed LIF only the opposite and you the AFA have a mandated duty to protect both customers and your members.
Your pathetic excuse that things might have been worse or could be worse with Labour doesn’t wash.
So forget that the FSC are your paymasters, start taking up the mantle in the same way as the LICG and DO YOUR JOB otherwise change to AFA leadership to people who can.
Clearly consumer outcomes and the truth are not an issue for the lobby groups that are pushing their agenda on LIF. So what are the AFA and FPA actually going to do about this to show that this legislation does not benefit any consumers and will actually make them worse off?