At a media briefing for its revised draft Life Insurance Code of Practice in Sydney on Monday, FSC senior policy manager Nick Kirwan told the audience that it received quite a bit of feedback from the adviser community on the first iteration of the code.
However, Mr Kirwan said the FSC wasn’t able to include most of the things requested from advisers from the first iteration of the code, and hasn’t included much in the current iteration.
“Bluntly, it isn’t a code for advisers. It is a code for life insurers. It’s a code for superannuation trustees and it covers the things that life insurers do, and it covers the things that superannuation trustees do, which are different for those customers,” Mr Kirwan said.
“But we recognise that if we have a better customer experience and customers can come to life insurers and approach it with more confidence that they will be treated fairly through the underwriting process. They will be treated fairly through the claims process. And they don’t always need to get legal advice every time they do this.
“That would be a better experience for advisers as well. We genuinely believe that. And of course, we look forward to any consultation feedback they’d like to give us.”
FSC chief executive Sally Loane said the revised code shows that it’s listening and acting on the concerns and issues raised by ASIC, the parliamentary joint committee inquiry and the Hayne royal commission hearings.
“The proposed new code is designed to lift standards in product design, sales, underwriting, customer service, complaints and claims handling, just to name a few,” she said.
“More than 30 significant changes have been made to practices that govern the way our member life insurers will treat consumers under the new code.”
Some of the proposed changes to the FSC’s Life Insurance Code include:
- Banning pressure selling of products and coercive retention tactics;
- Banning medical disclosure checking without reasonable grounds;
- Ensuring customers are no better or worse off at claim time (excluding fraud);
- Improving funeral insurance to ensure people understand what they are buying;
- Separating consumer credit insurance (CCI) from credit product sales;
- Binding trustees of superannuation funds to the code;
- Extending coverage of the code to include all life insurance distributors; and
- Reforms to underwriting, claims and mental health.
Mr Loane said the FSC will hold three public meetings in Melbourne, Brisbane and Sydney.
“In addition to the public forums, we will hold consultations to engage with the mental health community, Indigenous groups, religious support agencies and the broader consumer movement,” Ms Loane said.
“We will ask ASIC to participate in these stakeholder consultations, to provide their perspectives and to ensure the engagement is effective.”
It is interesting to watch and read the comments from the advisers the FPA and FSCs fearless executive Sally Loan. Sally your performance at the R.C was pathetic. Resign. The FSC Life Insurance Code of Practice has been designed for Life Insurers. This is true but it impacts on all players in the industry so why you ask should advisers be involved. Because they care about the wellbeing of the business and its impact on the vulnerable people if serves.
I find it absurd the pressure that’s been placed on advisers to get degrees or you can’t sell. In my case I’ve had a successful business for 40 years. Yes, I constantly study and educate myself with product estate planning, tax impacts and other forms of useful info for my clients. But I don’t have a Uni Degree. This must change. The experts say you must be better educated or perish. I have taken the latter I am retiring.
How is it that Prime Ministers, Heads of Banks and often companies are not compelled to have a Uni degree? Strange that.
The banks, industry super funds have conned the Government and the Public, When will you wake up.
Ask the insurers how much of the reduced commission was passed onto the clients in cheaper premiums – NIL. The following week after the legislation was passed some companies put up there rates.
The banks and insurers have simply taken 40% from the bottom line of my business and placed it on their bottom line. So much for looking after small businesses.
Fair – It is if you are a bank and bugger the consumer, you wonder why the advisers don’t trust the FSC. They are all for profit.
The first FSC Code was a JOKE. Mr Kirwan has come from the UK. Nick, the FSC received submissions from advisers because advisers KNOW what a pack of bastards some of your insurer members can be, as confirmed by the RC. The first Code did not include super Trustees, and Ms Loane discounted such suggestions. Now apparently, after her appearance at the RC, Trustees are in, as I suggested in my submission on the first Code. That’s because it is possible for an insurer to pay a claim to the super Trustee yet the money is not paid to the Member, based on the Trustees interpretation of some opaque rule.
Too late to be saying that the code is not for advisers. The advisers have bolted away from the industry and I am one of them after 39 years in the industry because of these. The commission issue and the education issue. When we have MPs, Ministers and even Prime Ministers and Premiers with no proper qualifications telling us what to do and they do not how to run a country or state. When I walked away from my business and retired in January 2018, I feel very sad for my staff who also had to leave.
Reality is the FSC is the problem, not the solution.
“Mr Loane said the FSC will hold three public meetings in Melbourne, Brisbane and Sydney…”
Seems a lot more changed than just the code… 🙂
The code is not for advisers and in fact none of the reforms are. Why then are adviser not able to be paid a commission from the insurer for the work they have done to ensure that the client is treated fairly as the article suggests, however, lawyers who fight for fair are able to take a very large percentage of the claim? Sadly not to many advisers will be able to afford to be in the life risk space and leave it to the client to sort out meaning more and more will need legal advice at claim time meaning less in the clients pockets, how is that reasonable? Tired of this being a witch hunt no real thought is going into any of this.