LIF Review

Can we have an explanation as to what happened to the LIF review once it had been stripped from ASIC and folded into the QAR. The life insurance industry is certainly not getting any better and it would seem that any mention or reference to it has been promptly forgotten about by the minister. If anything we've just had more rather than less compliance added.

insurance

Phil.Anderson
2 years ago
Hi Peter, Thanks for your question. The simple answer is that Michelle Levy recommended keeping the LIF caps and clawback as they are. She went further to suggest that client consent should be mandated, although this would be a once off, would not need to be provided to life insurers and could be transferred on the sale of a business. Basically it was consistent with the current practice of getting the client to sign the ATP. The Government has agreed to this, and last month they issued draft legislation to enact the client consent requirement.

That does not answer your question, which is concern about how this fixes the life insurance advice sector. Michelle Levy thought that her other recommendations, such as removal of the BID safe harbour and rationalisation of advice documents would reduce the cost of providing life insurance advice and thus make it more viable. Hopefully that will be the outcome, however we will need to see if that eventuates in practice.

3 Replies

Phil.Anderson
Advisely Partner
2 years ago
Hi Peter, Thanks for your question. The simple answer is that Michelle Levy recommended keeping the LIF caps and clawback as they are. She went further to suggest that client consent should be mandated, although this would be a once off, would not need to be provided to life insurers and could be transferred on the sale of a business. Basically it was consistent with the current practice of getting the client to sign the ATP. The Government has agreed to this, and last month they issued draft legislation to enact the client consent requirement.

That does not answer your question, which is concern about how this fixes the life insurance advice sector. Michelle Levy thought that her other recommendations, such as removal of the BID safe harbour and rationalisation of advice documents would reduce the cost of providing life insurance advice and thus make it more viable. Hopefully that will be the outcome, however we will need to see if that eventuates in practice.
- Peter.Monnock
  Curious Observer
  2 years ago
  Good afternoon Phil,
  Thank you for your message, I figured it was a wait and see scenario. Up until recently I was hoping for a bit of a reduction in red tape for Risk advice rather than the extra consent form that was added to the pile.
  Appreciate you taking the time to answer my query, have a terrific weekend.
rainier.reyes
Advisely Team
2 years ago
Great question Peter.Monnock and very topical as the Government provides its final response to the QAR today. Keen to hear what our experts think.

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