Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

Life insurers need to clarify responses to new regime: Synchron

Synchron/life-insurance/UCT/Don-Trapnell/

18 March 2021
| By Oksana Patron |
image
image image
expand image

Synchron has issued an urgent call for life insurers to clarify responses to the new Unfair Contract Terms (UCT) regime, saying advisers need to gain more certainty around how life insurers will treat policies that lapse, change ownership or change premium structure before the new regime will come into effect on 5 April, 2021. 

“Our understanding is that lapsed policies, policies that change ownership – for example from inside to outside super and the other way round, a change from level to stepped premiums and even simple typo corrections to a policy, will mean the policy has to be rewritten, which under the new regime means a new contract,” Synchron Director, Don Trapnell, said. 

He further explained that if, for example, a policy lapses, advisers would need to know whether the insurers would treat the ‘new’ contract as a replacement policy, or they would take advantage of the new regime to force policyholders into a completely new policy?  

Also, they needed to know whether the policyholder would need medical underwriting or they would be forced onto a different premium structure, and if so, would they lose a key benefit not available in the new policy. 

According to Trapnell, the way life insurers would respond may compound Australia’s underinsurance problem. 

“One of the big worries here is if we have tougher reinstatement, or additional underwriting, more policies will lapse, leaving more people without the protection they need. That’s a very poor outcome for Australia and for Australians,” Trapnell said. 

“In the best interests of policyholders and to assist the advisers who work with them, we believe life insurers must now publicly share how they intend to deal with this issue.” 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

3 days 23 hours ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

4 weeks ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

6 days 17 hours ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

2 weeks 1 day ago

The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted. ...

1 week 6 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND