In a submission to the life insurance inquiry – to be conducted by the parliamentary joint committee on corporations and financial services – the AIOFP said it believes life insurers are ramping up efforts to directly target consumers and bypass financial advisers in an effort to payout fewer claims.
“Allowing companies to sell flawed products directly to consumers without being underwritten and guaranteed upfront is an affront to consumer fairness.”
The AIOFP also said there needs to be more clarification around what is considered a lapse of a policy. For instance, the association does not believe the death of a policyholder should be considered a lapse.
“Policies that are terminated due to retirement or becoming obsolete to the consumer’s circumstances should not be considered a lapse,” the AIOFP said.
“The inclusion of these policies in the lapsed category can only serve one objective: to build a negative story against the advisers to justify change in the companies’ favour.”
Further, the AIOFP called for changes so that companies can be scrutinised by the Financial Ombudsman Service (FOS).
“Advisers and companies are shareholders of FOS, but only advisers are subject to legal process, scrutiny, threats of expulsion and subsequent loss of AFSLs,” the submission states.
Don’t worry Melinda, when the proverbial hits the fan with direct insurance claims being declined all over the place, the Labor Party, ISF and Adele (and i dont mean the singer) will be all over Financial Planners for creating that mess, even though by definition we arent involved in DIRECT insurance. Adele and 4 Corners managed to paint all the problems with GROUP cover within Union Super Funds as an extension of the advice faults with financial planners, so i’m sure she’ll be able to do the same here.
The AIOFP are getting a lot right lately.