Two major industry bodies have united to respond to ASIC’s highly critical report on the life insurance sector, forming a working group.
Last week, ASIC announced a year-long investigation into the life insurance industry had found more than a third of advice given was not compliant with the law.
ASIC Deputy Commissioner Peter Kell says the report reveals an unacceptable level of failure and called on the industry to work together to fix the issues.
The Financial Services Council (FSC) and the Association of Financial Advisers (AFA) have formed an independently chaired working group to respond to ASIC by December.
FSC CEO John Brogden says the group will specifically address retail life insurance product structures and distribution practices.
“It is critical that remuneration models in the life insurance industry are sustainable and practical for consumers and the industry,” he says.
“The ASIC report requires a serious response from the industry. We have formed a working group to achieve this. The working group will consult with the regulators and Parliament on its solutions.”
AFA CEO Brad Fox says the working group will allow an industry-wide response.
“It is vitally important for our members, and for their clients, that we consider all available options at the product, licensee, adviser and consumer levels to address the issues raised in the report and to ensure that consumers retain their trust in life insurance,” he says.
“It is important to remember that the majority of Australians do not have sufficient life and income protection insurance.”