Regulators harshly critical on life/risk
There are people still working in the insurance industry who have been rewarded as a result of products which proved not to be in the interests of the industry, according to Australian Prudential Regulation Authority deputy chairman, Ian Laughlin.
Speaking on a panel during the Financial Services Council (FSC) conference in Cairns, Laughlin said this fact represented a considerable challenge to the industry as it sought to implement change.
"The insurance industry hasn't managed things as well as it could have," he said. "A lot of the problems we are seeing in the industry are problems that we've seen before and a lot of the solutions that we're seeing are solutions we've seen before."
"So I ask what has changed to make things different this time," Laughlin said.
Australian Securities and Investments Commission deputy chairman, Peter Kell also expressed concern about the insurance sector from an advice perspective, suggesting that the industry had still not gone far enough.
"The industry has been grappling with the problem but I do not believe it has gone far enough, fast enough," he said.
Kell said the regulator was continuing to work with the industry on the issue.
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.
