September 10, 2018
Financial advice related to life insurance will not be examined during the current round of hearings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
During the opening address to the Commission, Counsel Assisting Rowena Orr, QC said that while more than half of life insurance was sold through financial advisers, the focus of the hearings would be on the direct insurance and group life markets.
“The financial advice industry was the subject of the second round of the commission’s hearings that took place in April, and because issues related to financial advice were considered in some detail in those hearings, the sale of life insurance through financial advisers will not be the subject of a specific case study in the coming week,” Orr said.
“In recognition of the significant role that financial advice plays in the sale of life insurance, we want to say something further about what the witness statements from the 10 life insurers say about the sale of life insurance through this channel,” Orr added, detailing the level of commissions paid by each insurer and the type of policies sold in 2017.
“…the sale of life insurance through financial advisers will not be the subject of a specific case study in the coming week”
Further confirmation that financial advice would not be heavily examined was evidenced in the list of case studies that would be reviewed this week.
The first two will relate to direct sales via call centres and will cover the practices of ClearView and Freedom Insurance, including sales process and products sold.
The third case study will consider the policy definitions in the area of heart attack and cancer previously used by CommInsure, and the handling of claims related to those definitions, which received widespread media coverage in 2016.
Two further case studies will cover the treatment of mental health issues in life insurance claims handled by TAL, and the provision of group life insurance by REST and AMP, including design of products and role of superannuation trustees in the claims process.