The Financial Services Council’s (FSC’s) Life Insurance Code of Practice has been approved by the organisation’s board with its provisions becoming effective from 1 October.
The code will be officially launched by the FSC tomorrow (Tuesday) with member companies having until 30 June next year to become fully compliant.
This week’s formal launch of the Code of Practice follows on from last week’s extraordinary general meeting of the Association of Financial Advisers (AFA) around the Life Insurance Framework (LIF) which ultimately rejected calls by some life/risk advisers for a constitutional change limiting the power of the board to deal with issues such as LIF.
It also comes just ahead of the Minister for Revenue and Financial Services, Kelly O’Dwyer introducing the legislation which will underpin the LIF.
The implications of the Code of Practice together with its impact on the actual workings of the LIF will be debated at a Money Management life/risk breakfast in Sydney on 27 October.
The AFA’s chief executive, Brad Fox, urged the FSC to make substantial improvements to its draft Life Insurer Code of Practice in circumstances where he claimed it did not adequately make commitments to consumers and the advice profession.
Fox said the code needed to include commitments to consumers and the financial advice profession, because approximately 50 per cent of Australia’s life insurance is arranged through the expert advice and [with] the support of financial advisers.
“The commitments to consumers contained in the Code are insufficient to drive cultural change, while the role of the life insurance financial advice profession has been ignored,” he said last month.
“Restricting the Code to setting out best practice standards for insurers in relation to underwriting and claims management does not go far enough in addressing the cultural issues and sales practices that work against consumer interests.”
