APLs may be core to Trowbridge outcome
Specialist risk advisers and their licensees may have the ability to hold insurers to account for their performance in delivering on their commitments via Approved Product Lists (APLs).
With the Financial Services Council (FSC) and the Association of Financial Advisers (AFA) currently putting in the groundwork for developing a framework out of the Trowbridge recommendations, Money Management columnist and claims specialist, Col Fullagar, has suggested advisers and licensees not overlook their ability to hold insurers to account via APLs.
Fullagar's comments follow on from his suggestion that insurers be required to commit to delivering on their product and service commitments.
He reiterated his earlier comment that if insurers were serious about wanting to overcome negative perceptions of the industry, it would pay dividends for them to focus attention on their own practices as well as those of advisers.
Fullagar said he remained strongly of the view that even if brilliant advice was implemented without any actual or perceived commission bias and the insurance remained in place, the public's perception of the financial services industry could still be decimated if the insurer acted in a way that was seen as untoward and/or unprofessional.
He noted that at least one risk-focused dealer group, Fortnum Financial Advisers, had already put in place a regime under which insurers were required to meet particular standards before being placed on the Approved Product List.
Recommended for you
The Federal Court has dismissed a conflicted remuneration case brought by ASIC against the director of life insurance distributor Freedom Group, where Bali holidays and Vespa purchases were among sales incentives.
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
