The AFA has approved Minister for Revenue and Financial Services Kelly O’Dwyer’s announcement of a removal of potential direct carve-out as part of the government’s revised LIF reforms.
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.
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