MetLife and other insurers have updated their Product Disclosure Statements in order to comply with the Unfair Contract Terms (UCT) legislation, which comes into effect from 5 April 2021.
A statement from MetLife says this UCT update is not being treated as a rewritten policy or a new contract, and therefore does not in itself trigger new underwriting (see: Urgent Call for Insurers to Clarify Responses to Unfair Contract Terms Regime).
“Further, changes to policies requested by an adviser on behalf of their client, such as moving a policy in or out of their superannuation, or changing from level to stepped premiums, does not trigger new underwriting,” the statement adds. It continues:
“Only changes that include additional or new benefits being added (outside of contractual obligations) would require underwriting.”
Meanwhile Financial Services Council CEO Sally Loane says the council has been working with its members to better understand the full implications, including unintended ones, of the Unfair Contract Terms regime.
…The FSC is in dialogue with the regulators to raise industry’s concerns
“The FSC shares industry concerns that as a result of these legislative changes, customers who took out a life insurance policy before April 5 this year may be adversely affected in certain circumstances.”
It says it’s in dialogue with the regulators to raise industry’s concerns.
“How individual life insurance companies respond must be a matter for those companies, as competition law precludes any collusion.
…advisers can help their clients by being vigilant about correspondence from life insurance companies
“However, advisers can help their clients by being vigilant about correspondence from life insurance companies, for example to ensure policies don’t inadvertently lapse,” she says.
Elsewhere, Integrity Life says it will release enhancements to its existing retail product on 1 April 2021 which include “…ensuring clear and consistent language and updates to medical definitions to reflect contemporary assessment, diagnosis or treatment of specific medical conditions.”
It adds that from 1 April 2021, all new retail customers and existing policyholders will receive the benefit of the updated terms and medical definitions.
The insurer says it is in the position of not having any legacy products. “…Therefore, our policy administration processes are not impacted by these enhancements.”
The new regime takes effect from 5 April 2021 and Riskinfo will shortly be reporting on other insurer updates following the implementation of the UCT regime.