The Australian Securities and Investments Commission (ASIC) has admitted it has received insufficient information from insurers to determine whether inappropriate payments have been involved in the sale of direct insurance.
Answering questions on notice from the Joint Parliamentary Committee on Corporations and Financial Services, the regulator said it could not say with certainty whether payments from insurers had inappropriately influenced the way products were sold and distributed, but it would be exploring the issue in its current review of direct life.
Dealing with the advised life insurance channel, ASIC said it did not have detailed responses on how and if payments to advisers were communicated to clients, but had seen several examples of Statements of Advice (SOAs) appropriately disclosing sponsorship, training and other benefits given to licensees and advisers from insurers.
“However, we cannot confidently say that this is prevalent across the financial advice industry,” the ASIC response said.
“There is insufficient information in the responses as to the nature of the payments to determine whether payments may inappropriately influence the advice given,” it said.
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This is a perfect example of the bias that is ASIC...its all well and good to say that commissions led to planners miselling, however the same payments to direct distributers, apparently this is somehow different and not worth investigating ? ASIC takes any chance at all to have a swipe at planners, but they just brush this direct commission payment structure under the carpet, same with the insurer/super fund relationships, its all Sargent Shultz when it comes to those areas, they know nothing...WHY?
The reason ASIC let the direct insurers get away with everything (from expensive premiums, to high pressure selling under half truths, to no compliance, to no BID) is because ASIC are staffed by lawyers. These ASIC lawyers can all see the light at the end of the tunnel when they move on from ASIC. That light is a job at one of the law firms making a killing from charging 30% of the payout fee to get the direct insurers to settle out of court. They know clients with advisers dont need to use lawyers to get paid their claim. Why else would ASIC want to remove advisers from the insurance process?
The other reason must be due to political lobbying from the insurers so that they can sell their Junk policies direct to the public without having to compete with each other on quality or price as they dont have to act in the best interests of anyone other than their share holders.
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