Risk Product, Company and Regulatory Updates as at 5 March 2019

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Product Updates

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Automated advice software developer opens Australian office
A Hong Kong-based digital advice provider, Quantifeed, is building its business in Australia as demand for its services grow in the automated advice space. Quantifeed is a B2B provider of wealth management software, with its platform allowing banks, brokers, financial advisers and insurance companies to launch digital advice services to their customers.

BT updates quoting and applications for risk, extends policy fee waiver offer
BT’s risk quotes and application platform, LifeCENTRAL+, has had two improvements, with split payment options now available, and integration with OmniLife’s risk research service. The policy fee waiver offer has been extended.

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Company Updates

Suncorp sale to TAL finalised
The sale of Suncorp’s Australian life insurance business to TAL Dai-ichi Life Australia has successfully been finalised. The total consideration of the sale is expected to be in the realm of $725 million, with an after-tax non-cash loss on the sale of about $880 million. Around $600 million in capital is estimated to be returned to shareholders. The sale signals the start of a 20-year strategic alliance between Suncorp and TAL to offer Suncorp life insurance solutions via Suncorp’s distribution channels, with Suncorp to earn income on the issuing of life insurance policies by TAL.

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Regulatory Updates

Grandfathered commissions on last legs
Treasury has published draft legislation to change grandfathered commissions and invited consultation. The proposal is for advisers to remove all conflicted commissions from their business by January 2020. This leaves 20 months to make the changes. A Professional Planner poll in late 2018 showed that 42 per cent of advisers were receiving between 15-25 per cent and over 50 per cent of their revenue from grandfathered commissions. Legal challenges are being considered by some opponents.

AFSL approval data released by ASIC
ASIC has published its Australian financial services (AFS) licence applications for the last financial year, with 1,728 applications and 758 approvals. There were 303 new licences and 455 licence variations. Over 200 applications were withdrawn, 196 were rejected for lodgement, and 561 were carried over into this financial year. Eleven applications were refused. Almost 200 licences were cancelled in the same period.

APRA’s 2019 targets outlined
APRA is set to build on work it began in 2018. Targets for this year include:

  • Ensure trustees of superannuation funds are prepared for new member outcomes assessments from July 1

  • Plans to implement a post-implementation review of the prudential framework introduced in the Stronger Super reforms of 2013

  • Consult on proposals to address areas that may need change

  • Update superannuation data collection, specifically the data gathered on choice products

Labor wants to ban all life insurance commissions
Labor has stated that it will ban all risk insurance commissions if no clear justification can be made to keep them. The current Coalition has said it wants to mandate level commission structures.