Advisers want greater group life transparency

13 December 2016
| By Mike |
image
image
expand image

Superannuation funds and their insurers should better disclose their commercial arrangements around group insurance in the interests of transparency, according to the Association of Financial Advisers (AFA).

The AFA has used its submission to the Joint Parliamentary Committee review of the Life Insurance Industry to argue for better disclosure around the differences between direct insurance, group insurance and retail advised insurance.

In a list of recommendations to the Parliamentary Committee, the AFA has pointed to a key differentiator between retail advised insurance and group insurance and has called for insurers be required to underwrite all insurance products at the time of application "banning the practice often seen in direct and group insurance of underwriting at the time of claim".

The submission has also recommended that insurers be required to not increase premiums during the first two years of policy commencement (thus matching the clawback period applying to advisers), except for consumer price index (CPI) increases in the sum insured.

It has also recommended that insurers be made to comply with the duty of utmost good faith with disclosure comparisons to enable informed decisions before consumers choose to replace existing policies that they hold into direct channels.

The AFA submission also recommended that, to facilitate better transparency and decision making, superannuation funds should be required to "disclose their arrangements with life insurers in relation to their group life insurance agreements".

It also recommended a review of remuneration rules to ensure that people insured through group insurance are able to access quality financial advice.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

1 day 14 hours ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

1 day 14 hours ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

1 day 15 hours ago