ASIC Opens Door to Trowbridge Proposal


ASIC has opened the door to the prospect of the Government considering further changes as part of the regulator’s 2021 review of the impact of the Life Insurance Framework remuneration reforms.

This indicator was flagged by ASIC Deputy Chair, Karen Chester, in responding to a call made at a panel session conducted at last week’s 2020 FSC Life Insurance Summit, during which actuary John Trowbridge questioned whether the present LIF remuneration model was sufficient to sustain access to risk advice for middle Australia (see: Call for Re-Think on LIF Reforms).

ASIC Deputy Chair, Karen Chester

Both Trowbridge and Deputy Chair Chester were panellists in a session whose brief was to consider the current state of the life insurance industry. Responding to Trowbridge’s call for a rethink on risk commissions, Chester outlined a number of points, one of which referred to the LIF review. She stated ASIC was “…looking at how industry has responded to the [LIF] legislative changes and whether there is a better alignment of interests such that the Government can then make a decision on whether any further reforms are required to be made to existing arrangements.”

Chester did not indicate the regulator would consider Trowbridge’s updated risk advice remuneration model, however her response did suggest ASIC’s 2021 review (to be completed in 2022) would be a potential opportunity for it to consider recommending additional reforms to the Government, which in turn would inform the Government’s consideration about whether further changes to financial adviser remuneration are required.

Trowbridge’s call and Chester’s response have come during the early stages of industry operation under the Life Insurance Framework and FASEA reform era that have witnessed a significant decline in the number of risk-focussed advisers and of authorised representative numbers in general.


  1. While Trowbridge’s new numbers are looking more commercial especially if one considers much risk advice is done for couples )which one assumes means two sets of policies and $4000 Upfront fee for business put in force) In practice Some jobs are more complex than others so a set fee would encourage lots of low value small Policies to be created. Or less work for same money (leading to losses for insurers). Practical reality means Rem must change with complexity and side of case.

  2. Either the compliance burden needs to be reduced or commission rates to be increased or a mix of both. ASIC’s lookback means high compliance burden and insurers are still reducing commission rates with TAL being the latest example, going down to where Zurich is – 23% ex GST for level commissions.

  3. Don’t the words, ‘the Government can then make a decision on whether any further reforms are required’, just fill you with confidence?

  4. ASIC to finalise their review by 2022, is akin to having a meeting down at the beach at the low tide mark, then as the rising waters threaten to wash everything away, they decide to adjourn the new motion as to why this is so, till the following day, when they will decide on how to fix the issue.

    ASIC have continually proven that they are incapable of fixing issues pertaining to the Advised Life Insurance Industry, worse still, they are the main cause of the issues the Industry is facing and should be removed from all future discussions.

  5. Gee what a surprise! Retail risk insurance advice industry decimated by over-regulation, education and halving of commissions has seen a mass exodus from this sector which will eventually deny Mum & Dad etc consumers the ability to obtain sound & professional advice. As for Trowbridge himself – definition of an actuary “an act you rarely” accept that lives in the real world, just like the politicians and their bureaucratic cronies.

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