FSC counters ASIC and urges self-regulation on life/risk

The Financial Services Council (FSC) has urged a Parliamentary Committee not to push for further legislation in the life insurance industry in circumstances where self-regulation should suffice.

The FSC has lodged a new submission with the Parliamentary Joint Committee on Corporations and Financial Services claiming its Life Insurance Code of Practice has introduced standards high enough to obviate the need for more regulation or legislation.

In doing so, the FSC has countered a submission from the Australian Securities and Investments Commission (ASIC) seeking greater powers to deal with claims handling disputes in the life sector.

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FSC chief executive, Sally Loane emphasised the direction of her organisations submission stating that "self-regulation can be implemented much faster than costly and time-consuming legislation".

"The Code has the capacity to evolve and change with consumer needs, and will deliver consumer benefits in a much more efficient and timely way than waiting for complex legislation," she said.

Loane claimed the life insurance industry had demonstrated it is committed to changes which benefit consumers via the Trowbridge processes and more recently the development of the code.

Further, she said ASIC had acknowledged that the code was likely to improve outcomes for consumers.

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So, Sally Loane, self regulation is OK so long as it suits your members self interest.
The Trowbridge report was flawed on many levels but you and your members of the FSC used that to get the government to do your bidding, shaft both the independent adviser and the public !
If "churning", the basis of most of the LIF legislation was so rampant, would you kindly answer the following questions please.
1. Why did most, if not all Life companies (your members) willing accept business from serial churners ?
2. Why didn't Life companies (your members) name and shame the "churners" ?
3. To curb this practice, why didn't one Life company become the first to reduce their upfront commissions without the intervention of government ?
4. Why did Life companies through poor underwriting practices feel the need to unilaterally increase their Income Protection premiums basically at the same time after the proposed LIF legislation ?
5. Why did one Life company see the opportunity to remove their top of the line Income Protection policy and introduce an inferior one at a lower cost whilst increasing existing IP contracts by 12.5%.
5. Why did one Life company increase their Group Life rates by 85.0% and only give 2 months notice of the increase ?

If you think your members don't need regulating, then they do need a dose of integrity, followed by an overwhelming dose of morality.
From an independent advisers prospective, your members are morally bankrupt on many levels and as history has shown, also when it comes to settling claims.
I think it should be emblazoned at the top of every Insurance contract ......
"When you pay your money... you take your chances with us "

Excellent points made. The life insurance industry had many years to get its house in order and failed to make any effort. This industry lost trust and credibility many years ago and has done little itself to save itself.

Her industry should welcome legislative oversight and penalties and these would go some considerable way of improving the reputation and opinion of the industry and might lead to more people taking up insurance and ridding the industry of moonlighters. It seems the industry can't see that, in the long run, legislation is for its own good as well as its clients.

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