The Life Insurance Framework will be introduced from July 2016, says Assistant Treasurer and Minister for Small Business Kelly O'Dwyer.
During a press conference outside Parliament House, Ms O'Dwyer, accompanied by Prime Minister Malcolm Turnbull and Treasurer Scott Morrison, said the Life Insurance Framework announced by then Assistant Treasurer Josh Frydenberg will be introduced from mid-next year.
"On 25 June in 2015, earlier this year, [Mr Frydenberg] announced an industry reform proposal with the Association of Financial Advisers, the Financial Planning Association of Australia and the Financial Services Council," Ms O'Dwyer said.
"Today we are announcing the adoption of that industry proposal in response to the [FSI] and that will commence from July 2016.
"There are changes to the up-front commissions that will be applied and also the trailing commissions," she said.
Ms O'Dwyer added that there will also be a clawback policy but did not stipulate whether it would be for the three years mentioned in the Life Insurance Framework.
The Assistant Treasurer's comments follow the government's official response to the Financial System Inquiry which supported the industry's proposed reforms over the recommendation made by David Murray for level commissions to better align the interests of financial firms and the interests of consumers.
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