During a Senate Economics Legislation Committee hearing yesterday, Mr Williams voiced concerns to the corporate regulator about the life insurance industry creating its own code of conduct.
While raising the issue, Mr Williams asked whether ASIC had received any feedback about the code of conduct – which is being developed by the FSC – pointing out that he had heard “it was pretty week”.
Responding to Mr Williams, ASIC deputy chair Peter Kell said it was “still early days” and the industry is working on its development.
“It is one of the elements that have been put forward to address the problems that ASIC and others have identified within the industry, and I still think it is in the consultation phase,” Mr Kell said.
“At this stage [the code of conduct] would be voluntary, but we have no indication at this stage from industry as to whether they may wish to seek ASIC approval of that code,” he said.
Mr Kell also added that if the code was not “robust” or led to the improvement of consumer outcomes then it is “not going to do anyone any good”.
The introduction of a code of conduct for the life sector was one of the requirements put forward within the Life Insurance Framework (LIF).
Yesterday Assistant Treasurer Kelly O’Dwyer introduced the LIF legislation into the House of Representatives, with the motion passing that the legislation be read a second time during the next sitting of parliament.
“I want to specifically acknowledge the work of the AFA, the FPA and the FSC in working together to achieve sensible reforms for the sector, which will benefit consumers through the provision of more appropriate advice and the long-term sustainability of the industry,” Ms O’Dwyer said while introducing the bill.
“Consumers will benefit through improved quality of advice as a result of a better alignment of interests, more product choice and enhanced competition,” she said.
I think all Politicians, State and Federal, should have to complete a relevant degree by 1 July 2019 !!
I would be interested in the uptake of new clients after full implementation post 2018.
If a new client came through now or post 2018 the extra cost would make little difference to those clients wishing to be insured.
Surprisingsly most insurance premiums have risen over the past several months.
You did not need to be a rocket scientist to realise that the FSC Code of Conduct was only ever going to a service standards agreement between the insurer and the client.
I can feel the vomit rising in my throat.
Consumers will be no better off and in reality lower income earners will be far worse as risk advisers will not be able to offer their professional services due to the cutting of commissions [to 60/20 in 2018] whilst the cost impost to advisers will only increase. This will result in a massive underclass left with little choice but to buy direct or rely on their super fund membership cover – in both instances delivering a sub-standard of insurance protection that will inevitably lead to rising welfare payments for all these under-insured Australians. The FSC however has done its job well to at least potentially underpin a more sustainable business model, albeit primarily at the expense of non-aligned and non-vertically integrated businesses. Well done Ms O’Dwyer & the FSC!