Shortly after the LIF bill was reintroduced into Parliament yesterday, the AFA announced its support for the legislation, saying it is part of a package that will drive consumer trust.
In a statement, the AFA said it endorses the Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016, which was introduced by Minister for Revenue and Financial Services Kelly O’Dwyer into the lower house yesterday.
The association said it contributed to an agreement in principle with Ms O’Dwyer on a package of life insurance reforms in November 2015, and has worked diligently since then to achieve a level playing field across all channels of the life insurance market through the detailed drafting and consultation period.
AFA chief executive Brad Fox said that while the bill does not give its members everything they want, there are many other stakeholders the government needs to satisfy.
“On balance this bill, as part of the package of reforms that includes the Life Insurer Code of Practice, an ASIC-led Statement of Advice review project and regular reporting from insurers to ASIC on lapse rates, means that consumers can have more trust and confidence in life insurance,” Mr Fox said.
Ms O’Dwyer said she reintroduced the legislation into Parliament to improve the quality of financial advice and boost consumer confidence in the life insurance sector.
She added that ASIC’s review of the life insurance advice sector, to determine the effect of the reforms, has been pushed back to 2021.
"The bill addresses problems with remuneration practices leading to poor quality life insurance advice for consumers that have been highlighted in several independent reports, including a 2014 ASIC Review of life insurance advice, the industry-initiated Trowbridge Review and the Financial System Inquiry," Ms O'Dwyer said.
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