One of Australia’s largest non-aligned licensees has joined the chorus calling on product manufacturers to reveal their secret submissions to the Life Insurance and Advice Working Group.
In a statement reflecting on their recent fact-finding mission to the UK, Synchron directors Don Trapnell and Michael Harrison said insurance providers need to “step up to the plate” by being transparent about their positions on contentious adviser remuneration issues and taking greater responsibility for the sector’s problems.
The dealer group bosses slammed the Trowbridge Report and the lacklustre response from insurers, describing the LIAWG process as having been “discredited” by the contents of the FSC’s submission which they say is “virtually mirrored in Trowbridge’s recommendations”.
“Instead of considering product innovation, Mr Trowbridge chose to focus on adviser remuneration and relied heavily on the conclusions drawn in the ASIC review,” Mr Trapnell and Mr Harrison said.
The joint statement also accuses insurers of doing little to eliminate churning, arguing they have “declined to act and are seeking Government intervention to bypass the ACCC and do the job for them”, suggesting that fear of being a “first mover” is leading to the inertia.
The statement also points out that in comparable markets, such as the UK and South Africa, insurers have helped eliminate churning by extending responsibility periods – a policy categorically opposed by Mr Trowbridge.
The comments come as the AFA also calls on insurers to make their submissions public, criticising the report in no uncertain terms.
The AFA's submission to the LIAWG can be found here: http://www.afa.asn.au/documents/item/777
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