BT Life to switch-off of pre-2013 SuperWrap life commissions

Life advisers who sold BT Life policies attaching to BT SuperWrap prior to the middle of 2012 have been told that commissions they believed had been grandfathered will be switched off as of 1 January, 2021.

The advisers have received calls from BT Life business development managers and have received a communication from the company informing them of the situation which is due to policies written before 22 June, 2012, now being regarded as having offered under a group policy.

The decision that the policies were technically deemed to be part of a group policy means that the commissions received by the advisers are not subject to grandfathering and will be switched off effective from 1 January, 2021.

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Some advisers were informed of the decision by BT more than a week ago, while others received notification only this week, leading to complaints that they have not been given sufficient notice to address the issue with their clients.

Similar decisions with respect to grandfathering have been taken by AMP Limited and Colonial First State.

Advisers have told Money Management that the decision around the status of the pre-2013 commissions will have a significant impact on their income, with some suggesting it will act as a catalyst for exiting the industry.

A spokesperson for BT Life said that Protection Plan policies offered in Westpac MasterTrust or SuperWrap with a risk commencement date before 22 June 2012 were individually underwritten but offered under a group contract as disclosed in the policy document.

“All types of commission on these group contracts must cease on 1 January 2021, as required under the legislation,” she said.

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I wonder if BT will pass the full amount of the commission through to the clients in the way of a reduction of policy fees???

Yes the commission is being fully rebated to policy holders.

Rebated until they hike premiums by same amount or close too. Thus easily switched Advisers Comms to more BT / Asgard Life profits.
Insto Rory’s yet again.

Correct - more BT price hikes already announced and BDM tells me more to come too

And so it begins.....

Such late communication
And it’s often wrong info from BT / Asgard.
We have been given lists of policies affected and then questioned how they were group policies and then have been told BT / Asgard gave us wrong info.
They have zero idea what they are doing.
They can’t answer questions and details properly.
They have no processes in place for the so called ongoing FDS Optin double up AFSL style compliance checks on SoAs, Upfront fees and FDS ongoing Optin fees.
And they have 1 mth pre Xmas to do this all starting 1 January 2021.
What a disgusting debacle.
What disgusting treatment of Advisers.
BT / Asgard are now BLOCKED from use on our Product List.
Disgusting incompetence deserves ZERO NEW adviser business placed via BT / Asgard.

I only have a few clients affected by this but it really disappoints me that BT Life has forced me into the debacle around grandfathered commissions. My points in relation to this are as follows:
1. It was never my intention, nor did BT bring it to my attention that affected client policies were written under a “group life risk” policy.
2. I have always written retail Life insurance business because I believe that my clients should go through an underwriting process upfront, so that there is no issue at claim time.
3. All my affected clients went through an underwriting process before their policies went into force.
4. My clients have never been charged discounted “group life risk” premiums under their policies.
5. BT Life informed me about this issue last week i.e. a month out from when these changes come into affect.
This is now a matter of principal for me. I do not have a problem with commissions being switched off going forward, allowing my clients to enjoy a discount on their future insurance premiums. I do have a problem with the fact that my clients have been charged retail premium rates in the past and have not enjoyed discounted "group life risk" premiums. In making this change BT Life must also refund premiums that my clients have overpaid in the past. Unconscionable conduct BT Life - not only in relation to advisers who support your Life insurance products but in relation your lack of support in best interest outcomes for our clients.

I couldn't agree more.
I only have a few clients this affects and am happy for the premiums to reduce.
BT should remediate the clients for being charged premiums at retail rates not group rates if that's the reasoning behind the change.

Wow Simeon, thats a top post, these instos are just doing everything possible to alienate advisers at the moment. They turn the back on the advisers that have been loyal to them for years. How can they turn around and say fully underwritten insurance is now group insurance? Dosent seem very ethical, maybe the managers there havent done that course yet.

Wouldn't worry too much about them being overcharged....'discounted group life risk premiums' are a myth, retail is generally cheaper.

But this can't be, the insurers are our 'partners', we're 'all in this together', they're there to 'support us'.

Honestly, if any adviser believes the tripe that comes from these product providers, I've got a bridge to sell you. They're only in it for themselves, they are not on our side and they won't help us out of the goodness of their hearts.

They are supplies - nothing more, nothing less - and should be treated as such.

This is a disgraceful act, made even worse for the timing of the 'update'. They couldn't have clarified this months ago like AMP and CFS?

So what exactly has gone on here? Did BT mistakenly believe the policies were retail but only at the last moment discovered they were technically group (as suggested). Or did they deliberately conceil this information to benefit themselves, due to fears about churn if advisers were properly warned?

Either way, there appears to be misconduct here, or at the very least, a gross breach of trust with financial advisers. BT gets out of this with no financial consequences, while financial advisers are thrown under the bus with no time to plan and coordinate a dramatic change to their remuneration structures. BT should be admitting their mistake rather than spinning BS. They should be urgently reaching out to ASIC, FASEA and Hume to see what level of compensation they can provide to the advisers impacted by their poor conduct. My heart goes out to the affected advisers. What a shocking christmas present, when they are flat out helping clients during a financial crisis and buried under unprecedented redtape.

Ha what a disgrace! So how long have BT sat on this information for? They didn't even give a hint to advisers this might be the case. Surely they knew at least 12 months before (probably longer)..... very poor. They knew Advisers would re-write policies (if appropriate) because of this, but once the rebated commissions come into play in Jan 21, Advisers would find it very hard to switch clients. Like usual its Advisers that wear the brunt of more BS red tape and regulations.

BT... what a poor excuse for a product provider.

Do not reply or return one piece of communication, correspondence or phone call from any BT BDM at all under any not respond on a permanent basis.
These product providers have not one ounce of consideration for the advisers that supported their business through placing their clients trust in the insurance contract.
They will simply burn anything with no regret and use the legislation as the excuse they had to do it.
They are all pathetic and none have any empathy, consideration or appreciation for the impact.
Move the business you can as long as it does not disadvantage the client and never go back to BT.

BT / Westpac have known about this for nearly one year. They sold these products to advisers as retail life insurance products. They were underwritten, charged accordingly and importantly claims have been paid in line with BT's retail product protocols. They have waited until this time of year to advise of these huge commission clawbacks along with significant increases to new business and existing in force business price hikes are about to be announced just prior to all the BDMs going on leave.

1) ALL Risk Policies are "Group" Policies - that's what Insurance is - Collective, Pooled Risk, i.e, A GROUP.

Every client who is underwritten, even in the most stringent, individual manner possible is part of a Group Policy with constraints and restrictions on entry, T&C and limits on payments, and prudential requirements to maintain. What defines a Group Policy? Automatic Acceptance? Reduced Underwriting? Limited Member numbers? What?

2) Suddenly, are the Fund Managers are "discovering" that the entire Pool Access was bought from a Global Reinsurer, or as a syndicated tranche from another local Insurer, and it somehow breaches some arcane, convoluted definition? I bet that this entire upheaval is due to 2 main things:

* Lawyers suddenly discovering some obscure contractual clause which "Might" be construed as something "untoward" in the eyes of ASIC, and they are all copying each other as fast as possible in order to CYA and look good to the Regulator for being as stringent as possible in eliminating the bad, evil, no good, poisonous, Covid and Leperousy inducing infectious disease of "Conflicted Remuneration"...

Of course, Advisers are "Low People on the Totem Pole", and while the sanctimonious executives, lawyers, and Bureaucratic Totalitarians feed at the trough of Taxpayer Money and the Penthouse Level Executive Allowances, well, "The peasants will find a way to survive", as long as long as we look good to each other at our 5 Star, Virtue Signalling Conferences; and while ignoring the collapsing Risk Pools, many more uninsured, and skyrocketing premium rates...

* Or, they found some way to make a buck from the reduced Administration or other self serving short term rationalisation, and need to make their KPI's and Bonus Targets.

In any case, as I watch the ignorant, incompetent, self destructive, short term thinking; the stupidity, venality, the lack of institutional trustworthiness, and comprehensive destruction wrought on the industry generally [alongside the ignorant, corrupt political clowns we have at State and Federal level], I wonder "How long will it be before society and the economy in its entirety collapse?"; and/or China walks in with an Airborne Division and conquers Australia in a week; daring the semi senile Biden to do something about it.

To paraphrase Bob Hawke: "Australia - the Stupid [and self destructive] Country".

If your first sentence is true, it needs to be exposed. Please pass on the info to Mike Taylor and/or other journalists so they can investigate the matter.

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