The Actuaries Institute has pressured the government to address the issue of legacy life insurance products as a means of maintaining the sustainability and efficiency of the life insurance sector.
In its pre-budget submission to Treasury, the Institute noted the Murray Financial System Inquiry had recommended that a mechanism be introduced to facilitate the rationalisation of life insurance legacy products.
“The Institute agrees with APRA that the government should pursue legacy product rationalisation more vigorously. Instilling greater public confidence in the life insurance sector will potentially boost demand for risk products, with the consequent effect of reducing social service payments,” the Institute said.
The Institute also asked policymakers to focus on the speedy introduction of a Comprehensive Income Products in Retirement (CIPR) framework to deliver retirees greater income protection and security.
Further, it asked the government to review its decision not to fund the Disaster Resilience Fund.
The president of the Institute, Jenny Lyon, said its recommendations were consistent with the government’s goal “to sensibly and responsibly restrain government expenditure whilst continuing to provide the services the community needs and expects”.
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