Churn action not forthcoming this year
No imminent action will be taken regarding churn despite a number of industry bodies expressing concern around the issue during the year.
Association of Financial Advisers chief operating officer Phil Anderson said his group had looked at the issue but had not received any further feedback from insurers or other industry groups who stated they were examining the issue.
Anderson said the AFA believed the reason for this was that there was only a small minority of people involved in the activity and they were being constrained by product providers.
Anderson said that insurers were aware of those who repeatedly engaged in churning policies for their own benefit.
"We believe product providers are dealing with those suspected of churning by limiting them to hybrid or limited commission products," Anderson said.
"They are not producing or supplying us with numbers around this issue but it is still a good outcome if they are dealing with it from their end."
Anderson said the churn issue had muddied the waters on the issue of insurance product change, particularly when it was in the best interest of a client.
"We know a small percentage of advisers do this for self interest and we support action against it, but it has painted product replacement in a bad light," Anderson said.
"There are a range of legitimate reasons to move products or insurers such as change in price, terms and definitions or client needs, which have been confused with churn in recent months."
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