April 3, 2018
Life insurance commissions will never return to pre-Life Insurance Framework reform levels and are likely to be reduced further under continuing reforms, according to the former Shadow Minister for Financial Services, Bernie Ripoll.
Speaking at the recent FSC Life Insurance Conference, Ripoll, responding to a question about what actions the life insurance sector should take to avoid further regulation, said “I can’t imagine any circumstances where things will go backwards to how commissions were treated, or where we will stay where they currently are”.
He added that “where are now is a soft landing for what was actually intended and a future government of any colour will continue the process”.
“Commissions as form of payment are in the past but we should not dwell on it for so long that we are not focusing on remodelling businesses and doing good things with insurance,” Ripoll said.
“I can’t imagine any circumstances where things will go backwards to how commissions were treated…”
According to Ripoll, the impetus for further change will be driven by more revelations of poor practices, despite statements that many of these no longer take place.
“There have been a series of reforms and reviews, and this tells us there are some issues in financial services and life insurance, and we can’t get away from that,” Ripoll said.
“Yet, we continue to be surprised by ongoing issues, even when we have been told these were past or historical issues,” he added, pointing to the recent Banking Royal Commission.
“So, there will be more reviews because trust is at its lowest in many industry sectors, but financial services is very low on all the trust barometers,” he said.
Ripoll said the life insurance sector does not exist to provide profit for self but exists to provide services to consumers and that if participants did not look at reform through that lens “…in three years there will be either same or more reform, but it will not be wound back”.