Risk Product, Company, and Regulatory Updates as at 13 December 2016

Product Updates

AIA enhances Priority Protection range
AIA Australia has made some changes to its Priority Protection range as of 10 December 2016.

  • New offer of 7.5 per cent AIA Vitality initial discount on income protection and business expenses insurance for new and in-force policies
  • New partial benefit crisis event for rheumatoid arthritis to pay 25 per cent of the insured benefit, up to $25,000 for eligible claimants
  • Definition of rheumatoid arthritis also updated
  • Stroke definition - outdated medical terminology removed
  • Surgery to the aorta definition now covers intra-arterial procedures
  • Certification period for terminal illness benefit updated from 12 to 24 months according to changes within superannuation rules
  • The Financial Planning Reimbursement of up to $3,000 can be claimed for costs incurred and paid up to 12 months after the claim has been paid (previously six months)
  • Income Protection Super Extras now allows premium splits of 95%/5% (previously 85%/15%) across superannuation and non-superannuation
  • Introduction of new CT occupation category for tradespeople from various industries with high accident or sickness risk, who perform moderately heavy manual work as part of their job
  • A premium rate freeze applies for the first two years of a policy, applying retrospectively for some products, effective dates from 1 December 2014 for level premium structures and 21 November 2015 for stepped premium structures
  • Increases apply to premiums on income protection and business expense plan rates of 10 per cent, applying to both stepped and level premiums, but does not apply to Priority Protection and Priority Protection for Platform Investors series commencing from 1 December 2014 for level premium structures and 21 November 2015 for stepped premium structures
  • Premiums for life, total and permanent disability and crisis recovery cover will not change

Company Updates

Zurich to buy Cover-More
Zurich is set to purchase listed travel insurer Cover-More for $741 million. Cover-More will retain its own branding and remain a stand-alone entity. 

Regulatory Updates

Carwardine Financial Services to be reviewed
Carwardine Financial Services is to undergo an external independent review of its finance law compliance after ASIC surveillance had concerns regarding its compliance with its obligations as a licensee regarding supervisory arrangements with its authorised representatives. 

Group Underwriters & Managers' AFSL suspended
ASIC has suspended the Australian Financial Services Licence of Group Underwriters and Managers Pty Ltd for three months until the required documents are lodged. 

LIF legislation passed through House of Representatives
The Life Insurance Framework (LIF) legislation has passed unopposed through the House of Representatives, with high upfront commissions to be reduced to help prevent churn. The government is set to mandate level commissions if a new review set for 2021 didn't show significant improvements.