Ms O’Dwyer released yesterday a revised draft legislation, which now “explicitly” ensures that the reforms apply to the direct sale of life risk insurance products.
Earlier this year, the AFA said it had reservations about a carve-out loophole exempting direct life insurance sales from the measures in the proposed legislation.
The AFA said in a statement yesterday it had negotiated with the government on this.
“This will ensure no loopholes and a level playing field for all advisers with absolutely no carve out for direct sales, and that any future sales methods designed to avoid the reforms will be captured,” the statement said.
AFA chief executive Brad Fox said it “has achieved significant improvements relative to an otherwise level commission outcome”.
Other changes include the commencement date of 1 January 2018 as well as the removal of transition arrangements that allowed commissions to be paid on stamp duty for one year only.
“The life insurance reforms form part of the government’s actions to build consumer confidence in the financial services sector through initiatives such as improving professional standards for financial advisers,” Minister O’Dwyer said in a statement.
“The government is consulting on revised regulations to ensure that these important reforms work as effectively and efficiently as possible.”
The Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016 was introduced into Parliament earlier this month.
Brad. You really don’t get it do you? The direct carve out is meaningless as the banks and insurance companies will sell junk direct insurance through salaried staff and bonuses.
As with the rest of the LIF you the AFA have achieved nothing that is beneficial to risk advisers or customers.
Are you surprised by MLC today announcing they will be increasing their direct insurance??? Watch the others follow suit after the adviser stitch up that is LIF thanks to the FSC and particularly the weak AFA.
Do you think the FSC companies will need to keep paying memberships to the AFA for their staff post LIF and you won’t have any risk advisers left either.