ClearView challenges FSC on LIF
Financial services group ClearView has strongly questioned the ability of the Financial Services Council (FSC) to objectively develop Life Code of Practice or the standard pertaining to Approved Product Lists (APLs).
ClearView has used its submission to the Senate Economics Committee review of the Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016, to question the role of the FSC, even though it is a member of the organisation.
The submission states: "While ClearView is currently a member of the FSC, we have reluctantly reached the view that the outcomes sought through the Life Insurance Framework (LIF) package will not be achieved if the FSC is permitted to continue its current course in developing the Life Code or APL Standard".
"This assessment results from the dominant position taken within the FSC by large, vertically-integrated life insurance industry incumbents who have no motivation to agree to industry practices that promote competition, innovation or greater choice for consumers," the submission said.
It said there were six areas that ClearView contended needed to be addressed to ensure good public policy outcomes with respect to life insurance:
• Changes to adviser remuneration
• Removal of conflicted remuneration (eg volume bonuses, shelf space fees, lapse or persistency bonsues)
• Opening up of APLs
• The development of an effective Life Code
• Enhanced adviser education
• The application of any new remuneration to Direct Insurance (ie Life insurance delivered through general advice channels.
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