June 8, 2017
AIA Australia has revealed further details of its private health insurance product roll-out including a 20 percent referral fee for advisers whose clients go on to purchase the product .
Addressing advisers at the insurer’s Life of Advice roadshow, AIA Australia Head of Distribution, Health, Craig Parker said financial advisers would be offered the referral fee on any client who took out private health insurance via AIA’s newly launched myOwn insurance brand.
Parker said advisers would not be required to give advice on private health insurance with AIA addressing that issue with clients directly.
“Health insurance is not a financial product and we do not expect and want advisers to supply advice or to compare. This is an opportunity to uncover a need…and refer a client through to AIA. We will contact the client and have the conversation and compare their existing fund and sell the policy,” Parker said.
“Health insurance is not a financial product and we do not expect and want advisers to supply advice or to compare.”
Parker described the referral fee, which would equal $600 on an average annual health insurance premium of $3000, as an offset to the decrease in commission set to take place under the Life Insurance Framework reforms due to start from 1 January 2018.
The referral fee, however, would be subject to a 90-day clawback period with 100% of the referral fee clawed back within 30 days, 50% within 31 to 60 days and 25% within 61-90 days, if the health insurance policy was cancelled.
AIA has secured its own private health insurance licence from APRA and has started to build out a pilot program which will run with six licensees – Aon, Bombora Advice, Integrity Financial Planners, Sentinel Private Wealth, Sentry Group and Synchron – for three months from 10 July.
Parker said myOwn and the six advice groups has put in place specific arrangements which covered the referral arrangements and the role and expectations of advisers and was also working with the groups on Statements of Advice templates and wording.