Risk Product, Company and Regulatory Updates as at 18 April 2017

Product Updates
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Asteron Life product update
Enhancements have been made to Asteron's Healthy Life Option discount that applies from 10 April, and includes: 

  • A 10 per cent Healthy Life Option discount applying to both stepped Life and Total and Permanent (TPD) disability insurance (reducing bundling)
  • Fewer questions are asked for the 10 per cent Healthy Life Option and 20 per cent Healthy Life Plus Option
  • Entry age is now between 30 and 55 (previous maximum is 50)
  • All eligible customers will automatically receive the 10 per cent Healthy Life Option discount
  • Offer applies to non-smokers, stepped premium policies, with a minimum of $250,000 sum insured
  • Factors required to meet the Healthy Life Option criteria are a body mass index (BMI) of less than 28 and no exclusions on policies

AMP updates prices for Elevate, AMP FLP, National Mutual, ACL, Elevate product groups
AMP is changing prices from 29 April 2017, with increases and decreases across products. In particular, prices have been increased for legacy products as purchased from National Mutual and Australian Casualty and Life (ACL), and Elevate policies taken out before 2013. Changes to pricing includes: 

  • AMP Elevate - Lump Sum Stepped
    Death and linked TPD: Premium reductions for life cover of up to 14 per cent (death) and nine per cent (linked TPD)
    Standalone TPD: premium reductions of up to five per cent for smokers over age 60
    Trauma: premium increases of up to five per cent
  • AMP Elevate - Lump Sum Level
    All benefits: 15 per cent premium increase
    Life and TPD: sum insureds of $250,000 or less will have five per cent loading applied to all premiums
  • AMP Elevate - Income Protection
    AMP Elevate Income Insurance Plan: rates stay the same or increase by 10 per cent (level of increase determined by age and existing benefit period); decreases of up to five per cent applied at older ages
    Smokers and females: five per cent increase
  • AMP FLP - Lump Sum Stepped
    Death: under age 50 subject to tapered price increases of up to 10 per cent, over age 50 rates stay the same or decrease by five per cent
    TPD: under age 50 subject to tapered price increases of up to 10 per cent, over age 50 rates stay the same or decrease by four per cent
    Trauma: under age 50 subject to tapered price increases of up to five per cent, over age 50 rates stay the same or decrease by 2.5 per cent
  • AMP FLP - Lump Sum Level
    Death, TPD and trauma: increases of 10 per cent
  • AMP Elevate Risk Protection Package - Level
    With less than two-month waiting period: 20 per cent increase in premiums
    With a longer waiting period: 7.5 per cent increase in premiums
  • AMP Elevate Risk Protection Package - Stepped
    With less than two-month waiting period: 10.25 per cent increase in premiums
    With a longer waiting period: 1.75 per cent increase in premiums
  • Flexible Lifetime Protection - Level
    With less than two-month waiting period: 30.25 per cent increase in premiums
    With a longer waiting period: 23 per cent increase in premiums
  • Flexible Lifetime Protection - Stepped
    With less than two-month waiting period: 15.25 per cent increase in premiums
    With a longer waiting period: 11 per cent increase in premiums
  • ACL - Level
    With less than two-month waiting period: 29.75 per cent increase in premiums
    With a longer waiting period: 11.25 per cent increase in premiums
  • ACL - Stepped
    With less than two-month waiting period: 16.50 per cent increase in premiums
    With a longer waiting period: 4.25 per cent increase in premiums

Company Updates
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FPA announces alliance to get more women into finance
The Financial Planning Association of Australia has joined forces with Financial Executive Women (FEW) to get more women into the finance industry. FEW offers career advocacy and support for women in their careers. Currently the FPA's membership is comprised of 28 per cent women. 

OnePath is for sale, sort of
ANZ has revealed that OnePath is for sale, though it might not happen anytime soon. A partner is being sought to run the wealth business, which is heavily weighted in with the insurance arm. The process is likely to take some time. 

Coles exits life market
Coles only took three years from the launch of its first product to back out of the room quietly on its life insurance business. MetLife has taken over from Coles Life Insurance this year. (The product was a white label product from MetLife anyway.) Coles still offers other types of insurance, and Coles' competitor Woolworths still offers life insurance products. 

Fiducian expands advice business
Fiducian is expanding its financial planning business by buying up practices, with the latest purchase in New South Wales at a price tag of $1.15 million. This takes Fiducian's recent acquisitions to over $250 million. 

Regulatory Updates
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FSC releases draft standard for APLs
The Financial Services Council (FSC) has released a draft standard for approved product lists (APLs) for life insurance. If the draft is approved, all FSC members will be required to comply by having a range of life insurers and have solid APL-developed processes in place. Best practice principles include having a dedicated, experienced research team help with creation of the lists, develop and utilise benchmark methodology to identify which products to includes, and consider multiple factors when reviewing the inclusion of a product or provider. 

Strategic Insight provides Life Insurance approved product list research to assist Licensees and their investment and product committee with their internal research process, using a unique holistic benchmarking methodology. Read more (http://www.pflresearch.com/apl-benchmarking/)

ASIC considers peer-reviewed bannings for adviser misconduct
ASIC is looking at a three-member adviser team to help choose which advisers may need to be reviewed for misconduct and banned. Many international regulators already use such a system successfully. The panel would have two financial services industry people and/or a non-industry participant (lawyer, academic), and one ASIC staff member. Cases would be referred to the panel by ASIC due to 'complexity, significance, or novelty'. The panel would decide whether ASIC should ban an adviser or not. Submissions on the proposal are due by 23 May 2017. 

ASIC scrutinising direct sales tactics
Direct life insurance is now looking down the barrel of increased regulation and closer inspection by ASIC, with potential issues identified regarding sales practices. The direct insurance market has a higher decline rate compared to group or retail policies, and higher lapse rates, making it a target for ASIC's investigating.