Risk Product, Company and Regulatory Updates as at 2 April 2019

Product Updates

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TAL introduces business underinsurance workshops
TAL is running a series of workshops to address business underinsurance via the TAL Academy, presented by national technical manager Scott Hoger.

The workshops are to focus on the technical skills required to create effective business succession plans, help advisers identify advice opportunities, and raise awareness of business insurance for small-to-medium business owners.

Company Updates

AMP removes leadership bonuses
AMP leadership teams will no longer receive performance incentives, former executives have forfeited long and short-term incentives, and fees paid to board directors have been reduced.

The move comes after disappointing business and financial performance in 2018 and the 2017 remuneration report, with concerns raised about the remuneration framework at the company. AMP saw a 97 per cent drop in full-year profits after the Royal Commission, with millions of dollars put aside for remediation.

MLC Life argues for life insurance commissions
MLC Life Insurance has released a statement in favour of continuing life insurance commissions. The statement, written by chief of group and retail partners, Sean McCormack, is centred around the sustainability and ongoing viability of life insurance advice after recommendations from the Royal Commission on the future of life insurance commissions.

The statement says that while client interests must come first, without a workable alternative model to commissions, removing all commissions has the potential to make life insurance advice unsustainable, increasing the risk of Australians having inappropriate policies in place that do not adequately support them during a time of crisis. McCormack is encouraging the Government to carefully consider its recommendations.

Westpac exiting personal financial advice
Westpac Group is removing itself from the financial advice space with a restructure after BT Financial Group businesses are merged into the Consumer and Business divisions. Changes are to include:

  • No provision of personal financial advice by Westpac Group salaried financial advisers and authorised representatives

  • Referral model implemented

  • Sale agreement entered into with Viridian Advisory, where current advice clients can transition to Viridian

Regulatory Updates

FASEA adviser education update
FASEA has provided advisers with an update on accreditation requirements. Approved recognition of prior learning for education undertaken to attain a professional designation - the FPA’s five-unit Certified Financial Planner program is worth two credits for the existing adviser pathway detailed in the Authority’s Education Standard.

This recognition of prior learning applies to advisers who took on the CFP program from Semester 2, 2003, instead of the previous statement which would have seen only those commencing after 2007 eligible. Further courses being assessed include the Association of Financial Advisers (AFA) FChFP course, which may also be worth two credits.

A list of higher education providers and their historical degrees expand the approved historical programs.

View the full FASEA Program & Provider Accreditation Policy

Treasury pushing for standardised insurance definitions for group insurance, consultation open
Commissioner Kenneth Haynes is seeking standardised terms and definitions for group insurance, with consultation open until April 26. Treasurer Josh Frydenberg is to determine cost, benefits, and possible pricing impacts that may develop with universal definitions, terms and exclusions for MySuper life insurance policies.