Risk Product, Company and Regulatory Updates as at 28 May 2019

Product Updates

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AIA Australia product and service enhancements, FASEA service announced
AIA Australia has made some changes to its Priority Protection (PP) and Priority Protection for Platform Investors (PPPI), including:

  • Combining PP and PPPI products under one umbrella and combining the product disclosure statements (PDS)

  • Enhancing total and permanent disability (TPD), crisis recovery and income protection benefits to simplify the underwriting and application process

  • Increasing maximum sums insured on TPD, crisis recovery and income protection policies, with enhanced offer for casual workers

  • TPD ‘All Duties’ upgraded to give greater clarity at claim time

  • Simplified underwriting processes for pastimes

  • Introduced enhanced pre-signing ability prior to underwriting for musculoskeletal conditions

  • Progressive underwriting approach for female cancers

  • Offer of heavily discounted educational programs with Kaplan Professional

  • Expanding AIA Vitality’s discount range on Virgin Australia flights

  • Introduction of AIA Vitality reporting system to allow financial advisers to engage with clients regarding health and wellbeing

AIA Australia has also announced an education program to deliver FASEA qualification requirements, partnering with Kaplan. A new support program is in the pipeline called Go for Gold to offer advisory business support, such as marketing packages, referral tips, and ideas for clients participating in the AIA Vitality program.

Zurich opens self-service life, super and investment portal, life risk update
Advisers now have a My Zurich portal to streamline client administrative tasks, with clients able to initiate updates that are quickly visible to advisers, for example credit card details and addresses. The system is set up to be like other elements of a client’s life, such as internet banking, where change of phone number, email address or downloading relevant documents is easy.

Zurich has also broadly updated its life insurance offerings. The following changes apply:

Wealth Protection - Lump Sum

  • Protection Plus - stepped and level premiums - trauma cover can be linked to stepped death or death and TPD cover

  • Protection Plus & Super Term - entry ages increased for death cover from 74 to 75, and benefit maximums for modified TPD now $5 million (up from $2 million)

  • Protection Plus & Super Term - word ‘Essential’ removed from TPD

  • Protection Plus & Super Term - Business Future Cover Option - no longer expires, with increases able to be made until option ends

  • All wealth protection policies - trauma definitions reviewed and most updated

  • Protection Plus & Super Term - loyalty benefit now built-in

  • Protection Plus (non-super only) - new in-built benefits, especially useful for non-metropolitan customers

  • Protection Plus - stand-alone TPD funeral benefit introduced

Wealth Protection - Income protection

  • Income Protector & Super IP - IP eligibility adjusted

  • Income Protector Plus (non-super only) - new in-built benefits, especially useful for non-metropolitan customers

All Wealth Protection policies

  • Two-year premium rate guarantee for new Wealth Protection policies issued on or after 27 May 2019

Active - Lump Sum

  • Active Cover - future insurability provision - more consistency applied across products

  • All Active Cover policies, including Child covers and IP trauma benefits - trauma definitions reviewed and minor updates made

Active - Income

  • Income Protector - IP eligibility - minimum number of hours worked for IP eligibility reduced from 24 to 20 for full-time, part-time and self-employed, 24 hours for fixed-term contractors and casual workers

  • Income Protector Plus (non-super only) - new inbuilt benefits, useful for non-metropolitan customers


  • Life Insurance - future increases provision - more consistency across products

  • Life Insurance and IP trauma benefits - trauma definitions reviewed and most updated

OnePath updates PDS and adviser guide
A new PDS and adviser guide has been published by OnePath for its OneCare range, having removed references to ANZ.

Company Updates

ANZ abandons Prime Access
Prime Access financial advice services are no longer being offered to new ANZ customers, and existing customers will see the service phased out over the coming 18 months. Prime Access was introduced in 2003, with an enforceable undertaking entered into with ASIC and ANZ relating to the service and several key failings in terms of meeting expectations.

YBR restructuring wealth arm, losing CEO
Yellow Brick Road (YBR) has committed to dispose, outsource or restructure its wealth functions. This will see job losses, with YBR having about 60 authorised representatives. YBR’s chief executive Frank Ganis is also stepping down, instead moving into a part-time consultancy role.

Franchisees will remain distributors of wealth products and financial advice to existing and future clients, however this will be done under a separate Australian Financial Services (AFS) licence with a third party. The move is designed to save money, since operating an AFS licence is costly.

Regulatory Updates

FASEA exam dates set for June, deadline missed for education approvals
The Financial Adviser Standards and Ethics Authority (FASEA) has set the date for its first round of financial adviser examinations. Advisers wishing to sit the exam have until May 31 to notify FASEA of this intention, with the exams going ahead in nine locations across major cities between June 20 and June 24.

Exams are also set to take place in September and December 2019, and February, April, June, August, October and December 2020. Existing advisers must pass the exam by 1 January 2021.

FASEA has also missed its own deadline for approving 14 graduate diplomas and 11 bridging courses submitted for accreditation. The cut-off date was April 12. No approvals have been made so far, with FASEA saying the process will take up to eight weeks.

ASIC seeks feedback on complaints handling
ASIC has initiated public consultation on a new set of standards regarding how financial companies deal with consumer and small business complaints. The proposed standards include mandatory data reporting, to increase transparency and create links with internal dispute resolution (IDR) schemes. ASIC is seeking feedback on:

  • Reducing maximum time frames for IDR responses

  • Figuring out what constitutes a complaint, for example if feedback is given via social media

  • Setting clear standards regarding what should be in written reasons for decisions

  • Strengthen requirements for firms taking a systemic focus to complaints handling

  • Hashing out the details of the new framework for recurrent complaints data reporting to ASIC

Consultation closes on 9 August 2019, with the new IDR standards to be released by the end of 2019. A new, separate consultation on the publication of IDR data will commence in early 2020.

Kaplan Professional brings in Deloitte for FASEA bridging courses
Dr Deen Sanders, Deloitte’s leader of ethics and professionalism, and a team of experts from Sydney University and the University of New South Wales, have been commissioned by financial services education provider Kaplan Professional to build and deliver three financial adviser bridging courses required by FASEA. The courses include:

  • Ethics and Professionalism in Financial Advice (proposed 8 July start)

  • Financial Advice Regulatory and Legal Obligations (proposed 2 September start)

  • Behaviour Finance: Client and Consumer Behaviour, Engagement and Decision Making (proposed 2 September start)

AMP admits churning, ASIC seeking civil penalties, class actions combined
ASIC is chasing civil penalties and a compliance plan order against AMP Financial Planning after admissions of advisers churning clients through life insurance policies, admitting this leaves AMP open to penalties of up to $1 million for breaching the Corporations Act.

ASIC took AMP to court in 2018 regarding churning by its financial advisers, where AMP ought to have known its advisers were up to this practice, but the company still did not act for two years.

Class actions launched against AMP have hit a hurdle, with just one being permitted by a NSW Supreme Court judge. This means the five class action lawsuits against AMP after Royal Commission admissions must combine to create just one.

Maurice Blackburn and Slater and Gordon have put their class actions together, while the other three suits have been stopped. Chief Judge in Equity Justice Julie Ward said that the ‘no win, no fee’ offer from the two law firms weighed on her decision, where there is no cost unless there is a return. Maurice Blackburn has been ordered to represent the plaintiffs, and pay a $5 million security deposit for the costs of AMP.

AMP has welcomed the decision, saying one class action provides the most efficient process for everyone. AMP intends to ‘vigorously’ defend itself.

AFA and FPA band together for risk commissions
The AFA and the Financial Planning Association (FPA) are to work together to advocate to keep risk commissions. The purpose of working together on this mission is to present a united voice to the government and regulators on the value of advice, and the role commissions can play in making advice accessible to consumers.