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.
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.
