Despite the Federal Government postponing the start date for the Life Insurance Framework (LIF) reforms a number of major insurers have indicated that greater certainty and clarity is still required before any start date of the new regime.
TAL, Group Chief Executive, Brett Clark said while the insurer had been working to reach the original 1 Jan 2016 deadline it had, and still was, working through details which had not been defined in the June 2015 announcement regarding LIF.
We had the announcement in June and once we got into the details we found it was not a high level framework.
“We had the announcement in June and once we got into the details we found it was not a high level framework. Since then we have had working groups looking to fill in the details and some of those details we have had to assess for ourselves or consult with other insurers or adviser groups,” Clark said.
Zurich Life & Investments, Head of Marketing and Communications Richard Dunkerley said the lack of detail had been one of the biggest hurdles in preparing for the start of LIF.
“Like advisers, the main issue for insurers has probably been the uncertainty around both timeframes and the finer details of the framework,” Dunkerley said.
“The majority of advisers we have engaged with over the last few months are seeking certainty, because they just want to get on with business. Undoubtedly some are still reluctant to go too far down a track until they have more certainty.”
ANZ Global Wealth, Managing Director Insurance, Alexis George stated that not only was the lack of detail around LIF making it difficult to prepare the lack of detail around the implementation was also a concern.
“Perhaps the biggest hurdle has been gaining certainty on all final terms of the LIF, as well the regulatory framework under which the new rules will be implemented and monitored,” George said.
“Clearly the debate continues, especially around the clawback time period. I think we would all welcome a change in this area to allow us to move back to the job of meeting our mutual customer needs.”
Until we have certainty on the detail it’s really difficult to finalise any development…
“Until we have certainty on the detail it’s really difficult to finalise any development we need to complete internally, as well as providing advisers with the support they need from us to transition.”
Clark said the lack of detail and certainty has also made it difficult to plan for the maintenance of current and legacy products and policies.
“We have re-engineered part of our business and from the start date the old and new models will co-exist,” Clark said.
“Some things will have to be grandfathered across during a transition or implementation period while we run two models that preserve the benefits of the old model and offer policies under the new model. The complexity around this cannot be underestimated.”
