A recently formed lobby group, made up of a number of notable life insurance advisers, will push for a Senate review into the Life Insurance Framework (LIF) and supposed misrepresentations by life insurance industry bodies to the Government regarding LIF.
The lobby group – The Life Insurance Consumer Group (LICG) – is also seeking a consumer impact study conducted by an independent organisation as well as a review of the costs to consumers if commissions are heavily reduced or removed and a review of consumer outcomes from direct or group life insurance policies.
According to the group’s website it will also provide the Government with a wide ranging set of data that contradicts that presented by the FSC, life insurers and banks around the cost of advice under LIF and the impact on consumers.
Speaking on behalf of the lobby group NOW Financial Group director Mark Dunsford said the group was non-political and not aligned to any adviser association and was seeking to “push back the myths around how the debate was framed and the flaws in the outcomes of that debate,” Dunsford said.
Dunsford said the group had received widespread support from across the risk insurance advice sector but was seeking to leverage the voice of all risk advisers through a petition, and was seeking 5000 names.
The petition states that LIF will not improve the quality or affordability of life insurance advice, nor will it increase competition among insurers to create better client focused products.
It encouraged advisers who did not believe LIF was beneficial in its current form and who made up the “unheard majority” to sign the petition before the close of the submission period on the draft LIF legislation on 4 January 2016.
Dunsford said the group had some ground to make up in correcting perceptions and refocusing the LIF debate on advice and not commissions.
“The Financial Services Council (FSC) and the life insurance companies used the Trowbridge Report to shift the debate from the quality of advice identified by ASIC to remuneration,” Dunsford said.
“This has been their agenda for the past few years and they have gained traction and driven a train through a legislative gap to focus on what advisers are paid.”
The LICG was formed in November and comprised of NOW Financial Group director Mark Dunsford, Empire Risk managing director Daniel Isenhood, GJO chief executive Greg Owen, Lambert Parkhill Financial Group managing director Ron Lambert, Life Insurance Direct chief executive Russell Cain, Bourke Financial Services director David Bourke, Bombora Advice managing director Wayne Handley, In Sync Financial Services principal Paul de Grande, Foundation Life Insurance and Mortgage Broking ,managing director, Patrick McLaughlin and Joe Perri and Associates , director, Joe Perri.
In November the LICG released a survey which found the proposed consumer benefits of the LIF model were not obvious and that many risk advisers remained sceptical of such claims from the Government and the Financial Services Council.
The LICG petition can be found at www.licg.com.au