LIF reform legislation expected in Parliament this week
The Assistant Treasurer Kelly O'Dwyer is expected to introduce the Life Insurance Framework (LIF) reform legislation into parliament this week.
Minister O'Dwyer told ifa that she "hoped" the reforms would be introduced into the House of Representatives this week, before being referred to the Senate Economics Committee.
"Legislation is expected to be introduced into Parliament this week," she said. "The government, with the agreement of industry, is striking the right balance for advisers and consumers."
Minister O'Dwyer emphasised there was agreement from stakeholders for the reforms.
"Last year the industry reached agreement on the implementation of these important improvements," she said.
In November last year the government released the final life insurance industry package, reducing the three-year clawback policy, but making no changes to commission rates.
In announcing the final details of the Life Insurance Framework, Ms O'Dwyer said, "The Government has responded to industry concerns about ongoing business viability by moving from a three to a two-year clawback period. However, through these reforms we are ensuring that we are addressing adviser incentives that encourage replacement of policies where there is no consumer benefit."
The proposed reforms will come into effect on 1 July 2016, with transitional provisions until 30 June 2018.018.
Industry associations responded positively to the government's release of the final life insurance reforms package last week, while others believe further reform will eventually be needed.
The AFA said that the refinements to the clawback provisions, which have been reduced to two years, will be "received with relief by their members".
In December, the government released exposure draft legislation for industry consultation.
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