The Federal Treasury should re-engage with the issue of rationalising legacy products in the life/risk space, according to the chief executive of Suncorp Life, Geoff Summerhayes.
Summerhayes has used his company's second submission to the Financial Systems Inquiry (FSI) to back suggestions in the inquiry's first report that a cost-effective and consistent product rationalisation regulatory framework be pursued.
"I support this and recommend that Treasury should issue a discussion paper on the options for streamlining and simplifying the life insurance product rationalisation mechanism, including consideration of tax implications," Summerhayes said in the Suncorp Life submission.
"Priority needs to be given to life insurance given the absence of an existing efficient mechanism relative to other areas such as superannuation. However, for completeness, superannuation should be included in any further review and cross-sector rationalisation should be examined, to enable the rationalisation of life insurance company issued superannuation into modern superannuation products," he wrote.
Elsewhere in the Suncorp Life submission, Summerhayes has argued for tax incentives to encourage the take-up of appropriate cover, in similar terms to those which apply to health insurance.
"There should be consideration of public policy changes to improve the take-up of private life insurance cover including income and private personal injury and sickness cover," he wrote
"Analysis of the net financial impact of the introduction of appropriate financial tax incentives and disincentives to achieve improved levels of cover should be explored (analogous to the existing policy settings on private health insurance where there is a rebate system as an incentive for taking out cover and a levy for those that don't)," the submission said.
