The FSC has given limited support to some of the recommendations of the PJC Inquiry into life insurance at the same time as one of its members has used the report to criticise the Council’s Approved Product List (APL) Standard.
In its response to the report, the FSC stated it had listened to the evidence presented to the Committee during the 18 month inquiry and had already introduced a number of initiatives to improve consumer outcomes.
The Council stated that the current version of its Life Insurance Code of Practice and its next iteration, due for release later this year, addressed a number of the issues identified by the PJC in the areas of claims handling, medical definitions, mental health, and time-frames for dealing with customers and claims.
The FSC also stated it supported the call by the PJC for the Government to take action over the rationalisation of legacy life insurance products but was disappointed the Committee did not make a stronger recommendation to allow life insurers to become involved in rehabilitation efforts for claimants.
Response to the PJC Report at the time of publication was limited with the FPA and AFA yet to make public statements, however, life insurer ClearView used the opportunity to label the FSC’s APL standard as ‘grossly inadequate’ and called for the Council to require members to offer open APLs.
“If the FSC does not act decisively to amend its standard in line with the PJC report, the government must intervene…”
In its report, the PJC called for a shift to APLs with a balance on inhouse and external products followed by an eventual transition to open APLs to avoid a lack of transparency and conflicts of interest in the creation of the lists.
Additionally, it stated, “The Committee is not convinced that the draft APL Standard [now finalised, see: FSC to Require at Least Three Insurers on APLs] being proposed by the Financial Services Council will adequately address the full range of concerns identified by this inquiry”.
Reiterating similar comments made nearly a year ago (see: ClearView Labels APL Draft Standard as ‘Ineffectual’), ClearView Managing Director, Simon Swanson said the PJC had produced a client-centric report that called for a higher standard than the three providers that the FSC requires of its members.
“It’s clear that there’s strong widespread support for unrestricted APLs that give financial advisers the autonomy to use their knowledge and experience, and exercise their judgement, to recommend the best solution for clients from the 11 or so retail life insurers in the market,” he said.
“If the FSC does not act decisively to amend its standard in line with the PJC report, the government must intervene to foster competition, legislate choice and ensure the best interests of clients are served.”
Riskinfo, how about a survey along the lines of – “Do you believe the FSC has and does act in the best interests of advisers and their clients?” Such a survey will show how advisers really feel about this appalling body? The again, I may be wrong…….
It may just be my self interest here, but I think that all Life Companies and their practices and products should be reviewed by the licensee to ensure that they earn and continue to earn their place on the APL.
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