AMP has announced that the separation of AMP Life is on track for completion by 30 June 2020.
The insurer says, in releasing its FY19 results, that it has received approval from the Chinese regulatory authority, CBRIC, and it is continuing “to work with other regulators on achieving conditions precedent”. (See: AMP to Sell Life Insurance Business).
The results statement from AMP also states it has “made significant progress in reshaping its advice network to be compliant, professional and more productive; approximately 440 advisers exited the network in FY19”.
As to its client remediation programme, AMP says it is on schedule to complete in 2021 and that $190 million had been paid in 2H 19.
AMP Chief Executive Francesco De Ferrari says in the results statement that “as promised, we have prioritised client remediation and made significant progress.
“We expect to have completed 80 percent of the programme by the end of FY20, with completion in 2021, as we have consistently guided.
“We have agreed the main outstanding areas of our programme with ASIC, including for advisers who are no longer active in our network,” he says.
“We remain committed to putting it right for impacted clients as quickly as possible,“ the statement says.
The insurer notes that client remediation comprises the following components:
- Inappropriate advice: Programme approximately 50 percent complete
- Fee for no service:
- Active advisers: Programme approximately 20 percent complete
- Inactive advisers: Pilot programme for inactive advisers has commenced
- Overall fee for no service refund rate expected of 17 percent (29 percent including interest) of total ongoing service fees charged
- Programme costs tracking to expectations
AMP’s statement says the total programme spend to date, including programme costs and money repaid to clients, is $264 million with $190 million paid in 2H 19.
“Major policies now agreed with ASIC including active and inactive advisers.”
It states: “2H 19 additional provision of $150 million primarily relates to finalisation of inactive adviser approach. Overall remediation costs remain broadly in line with original estimate provided in November 2018.”
