Risk Product, Company and Regulatory Updates as at 25 February 2020
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Product Updates
AIA Australia changes to products
As AIA Australia completes the integration with CommInsure Life, no new business for a handful of retail life products will be accepted. CommInsure Protection products are closed to new business as of 31 March 2020, with current customers seeing full support and service. Priority Protection products have been enhanced with an involuntary unemployment benefit, which was once a key CommInsure Protection feature.
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Company Updates
MLC Wealth separation delays
National Australia Bank (NAB) has noted that the separation of MLC Wealth may be delayed beyond the financial year 2020 due to a challenging business environment. Operational separation has progressed, but the exit may need to wait a little longer to ensure the best outcomes for all stakeholders in a disciplined exit.
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Regulatory Updates
Liquidators appointed to Freedom, directors resign
Freedom Insurance has voluntarily appointed liquidators, while three directors have resigned. The Australian Investments and Securities Commission (ASIC) has yet to give the final word on the closure. Freedom’s problems began during the Royal Commission where is was revealed that the company had sold life insurance to a man with Down syndrome. A Deloitte review and predictions of a liquidity shortfall in 2019 saw the life insurance arm of the business close. ASIC recently banned the chief executive of Spectrum Wealth Advisors, a subsidiary of Freedom Insurance Group, and accepted Spectrum’s licence cancellation request.
New class action against IOOF
Shine Lawyers have commenced a class action against IOOF on behalf of shareholders, due to alleged misconduct within IOOF from 2009 to 2015, with a specific focus on those who bought shares between March 2014 and July 2015. An investigation led to Federal Court orders for IOOF to produce certain documents relating to the alleged misconduct.
IOOF shareholders have had their share value decrease significantly after alleged failures of IOOF management across several years, with the loss not recouped. Shine Lawyers said the claim is ‘largely’ unrelated to the claim against IOOF by the Australian Prudential Regulation Authority (APRA). Litigation Lending is funding the class action.
The last class action against IOOF was brought by Quinn Emanuel Urquhart & Sullivan in 2019, a direct response to evidence given at the Royal Commission and legal proceedings brought by APRA against five IOOF executives. The Federal Court found IOOF did not contravene the Superannuation Industry Supervision Act.
FASEA approves more courses
The Financial Adviser Standards and Ethics Authority (FASEA) has approved the courses of two industry associations and two university bridging courses. Applications have been approved from the Association of Financial Advisers (AFA) and the Stockbrokers And Financial Advisers Association (SAFAA).
Advisers who completed coursework for the FChFP or ChLP designation between May 2009 and June 2013 offered by the AFA are awarded one credit recognition for prior learning. Advisers with a Professional Diploma in Stockbroking for the SAFAA Specialist designation from 2001 by SAFAA are also awarded one credit in prior learning.
