- Too difficult to predict (40%)
- No changes - the proposed legislation will be implemented 'as is' (22%)
- Minor changes only (16%)
- LIF will be replaced by entirely new legislation (12%)
- Significant changes will be made (10%)
In the lead-up to this week’s Federal election, we’re asking you to gaze into your crystal ball and predict the future of the proposed Life Insurance Framework reforms.
Political analysts appear to be tipping the Coalition to retain power in what has been a closely-run race. But the result of last week’s Brexit referendum proves that polls and pundits can get it wrong. Very wrong.
The future of the currently-proposed LIF legislation may be dictated by factors including who forms Government after this Saturday’s election; whether there will be a different Financial Services Minister, irrespective of who wins, and the nature of lobby group approaches to a new Government which will need to reintroduce the legislation via the House of Representatives.
Your crystal ball gazing and predictions will depend on your own view of these and other factors.
AFA President, Deborah Kent, has recently cautioned that any post-election changes to the proposed LIF reforms will have the same or greater impact on advisers: “Depending on which party forms power after the election, LIF may continue substantially in its current form, or it may not. From the discussions we have had with the major parties, they will proceed with some type of life insurance reform,” Kent stated, while adding, “None of the parties have shown any indication that the outcome would become more favourable for advisers than the current form of LIF.” (See also: Election Unlikely to Change LIF for Advisers).
Despite this holding pattern during the election campaign period, however, individual advisers and adviser groups such as the LICG continue to agitate for change, arguing, among other issues, that the currently-proposed legislation does not serve the interests of consumers in any material way, and that the Australian Competition and Consumer Commission should become involved in assessing the nature of the proposed reforms (see: LICG Asks Why Churn Not Raised With ACCC).
A Labor victory on Saturday may see a significant change to the legislation before it is re-introduced to the new Lower House, but there is presently so much uncertainty in the market because of all the permutations that it’s almost impossible to predict an outcome for the LIF reforms with any degree of certainty.
So, it’s over to you to make your predictions. Tell us what you think will happen, and what this may mean for you and your business…
The second half starts when the election is over, the dust has settled and the LIF is reintroduced.
The AFA MUST under their constitution, abide by and follow the very principles they have set down for themselves, which is to question the reasoning and justifications behind the LIF, which is full of holes and would never achieve it’s objective of improving outcomes for all Australians.
It is not debatable, the AFA and FPA must start doing their mandated jobs, which means not only questioning and fighting unfair and uncompetitive aspects of the LIF but more importantly, expose the lies the FSC has perpetrated and have them removed from future discussions.
This is a very easy job for the AFA and FPA, as the FSC has made so many false statements, observations and recommendations, that a blind person could find the truth in seconds and expose the FSC for what it is.
The best outcome would be that the government of whichever flavour drops the whole thing and we go back to where we were prior to the proposed changes. It worked well then and will still do so in the future. Probably better, because all advisers know what was mooted and will be on their guard to ensure that LIF doesn’t raise its head again.
Likely though, many other readers will think that if I believe this, then I must believe in the tooth fairy.
LIF is a stitch up job by vested interests and for everyone else it is a waste of time, energy and effort.
The current FOFA law is more than adequate to deal with issues as reflected by recent ASIC action against NSG Services Pty Ltd which involved the “mis selling” of insurance products.
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