Speaking at the Life Insurance Conference yesterday, FSC chief executive Sally Loane said policymakers are questioning what role group insurance should play in the future and how it should be structured.
Ms Loane said the current opt-out mechanism within group insurance needs to be preserved.
“Without this, people would slip through the net,” she said.
“It would also make insurance more expensive, potentially pricing out or removing access for many Australians who receive cover today.”
Ms Loane said Australian super fund members received $4.4 billion in insurance claims benefits through their group insurance cover in 2015.
“Ninety-two per cent of the working population is afforded some type of insurance cover that would not otherwise be in place without group arrangements,” she said.
“Many Australians, for example those working in heavy industry or with a pre-existing medical condition, may not be given access to any cover at all if it wasn’t provided in their workplace fund.”
Ms Loane added that the recently released FSC Code of Practice will be extended to cover super trustees in group insurance.
“To this end, we are working with other industry associations, CHOICE and insurance product providers in yet another group – the Insurance in Superannuation Working Group,” she said.
Had a client come to see me the other day..group insurance via corp fund paying $200 pm for TPD insurance $250k age 60…not bad on the surface…except hes a casual (has been for over 20 years…just the nature of the industry they are in) so the TPD cover is actually only Acitivities of Daily Living cover…client was shocked once they read the fine print…which by the way was not on the statement…had to go back to the PDS for that one. I’m all for group cover…it has it’s place but it should be industry standard terms and call a spade a spade…the ADL cover just for being casual costs the same as the full TPD cover…blatant rorting
So the $4.4B paid in claims is corruption and indicative of junk insurance? I find it curious that the Life industry made universal losses over recent years from these payouts
Two great comments-I could not agree more- as a risk adviser.
Ms Loane is as usual selective into the issues she has a a comment. Just like Mr Whitely from the ISN.
Where was Ms Loane last week when it was revealed that hundreds of thousands of Australian workers, whose working status changed from permanent to casual, were no longer covered under the same terms and conditions of their insurance policies contained in their not for profit super. Funny about that!
What happens when the majority of the Australian workforce becomes casualised.
And by the way where is the much lauded (by the insurers) FSC Life Insurance Code of Practice. And is the FSC still insisting that the Code should not apply to the Trustees of not for profit super funds who have the final decision on whether or not an insurance claim by one of their members is paid.
No noise either from Ms Loane on the ridiculous 30% increase to existing AMP LEVEL PREMIUMS on income protection policies, sneakily announced by AMP last week. Does the FSC think that the public and their advisers could expect better from mismanaged insurance companies or is that issue been waived through as well by the FSC.
LIF was supposed to be good for consumers. Yet insurers can still announce outrageous premium increases after sitting on them for 6 years
Sally Loane always states that anything that increases profits for the FSC members is “good for the customer”. Having insurance through super whether you asked for it or not is “good for the customer”. Halving commissions to independent risk advisers so that in the future customers will have to face fees to be able to get independent risk advice or only have the option to buy junk direct insurance is “good for the customer”.
The FSC members facing further government scrutiny over dodgy practices is “NOT good for the customer”.
The FSC is simply a corrupt cartel run by overpaid CEO’s who put themselves and profits before customers and anyone else and actually think that people believe the rubbish they talk.
Sally Loane states “It would also make insurance more expensive, potentially pricing out or removing access for many Australians who receive cover today.” But doesn’t think twice about the effect on retirement for Australians who are being fleeced on overpriced junk insurance that they don’t need and the devastating effect this is having on their retirement saving or about the LIF “pricing out” the ability for customers to receive independent risk advice in the future.
Pure corruption at its best.