The call for Australians to be given access to simple personal advice from their life insurer generated significant interest among Riskinfo readers this week…
MLC Life Insurance is calling for more Australians to be given access to simple personal advice from their insurer.
The company has welcomed the Government’s commitment to implement 14 of the 22 recommendations made by the Quality of Advice Review (see: Industry Groups Generally Welcome QoA Review Decisions).
Kent Griffin, CEO of MLC Life says the firm is pleased to see the Government delivering better financial outcomes for Australians “…with clear reform to make financial advice more accessible and the intention to allow members of superannuation funds to access advice on an affordable basis through their fund.”
But, he says “…more can be done to look after those that need access to affordable, simple advice.”
Griffin adds the Government’s announcement to allow super funds to provide advice to their members “…is a terrific step in the right direction.”
…The same notion that would see super funds provide customer service … is also true for Australia’s life insurers…
“The same notion that would see super funds provide customer service so their members have access to personalised information to make the right choice for their circumstances, is also true for Australia’s life insurers.”
Michael Rogers, Chief Individual Insurance Officer for MLC Life Insurance says Australians are asking pretty basic questions “…all ultimately seeking appropriate coverage that’s affordable and accessible and it is virtually impossible to help if we can’t provide simple advice to our customers that suits their personal circumstances.”
Rogers notes that every day, customers contact the company for help as they seek to ensure they have the most appropriate cover at an affordable price.
“In instances where the customer no longer has an adviser, the current advice rules mean we’re simply not allowed to assist them. This isn’t about making sure more people have more insurance, we want to make sure our customers have insurance that’s affordable, accessible and appropriate.”
Rogers says that from a consumer protection perspective “…most people believe they are seeking basic customer service and the QoA Review clearly identified that the current situation doesn’t provide enough choice for Australian consumers who are seeking simple insurance advice that isn’t comprehensive.”
In most cases, customers are simply seeking guidance to help them make a decision about their coverage in the face of changing life circumstances, including the birth of a child, the purchase of a home, or a change in their employment.
“For many Australians a financial adviser is an important investment, but for some they are simply looking to check their coverage or review their policy,” says Rogers.
…insurers are governed by an obligation to act in the interests of our customers…
Griffin adds that like super funds “…insurers are governed by an obligation to act in the interests of our customers, including section 13 of the Insurance Contracts Act of 1984, which imposes a statutory duty of utmost good faith on life insurers, and has been interpreted by the courts as requiring the insurer to look to the interests of the policy holder.”
He says these obligations are in addition to the many consumer protection and conduct obligations by which life insurers are currently restricted to operate only in the interests of customers and potential customers.
The company says life insurers, like trustees and super funds, operate in an environment where the interests of customers are at the core of the business, both culturally and because of a robust regulatory environment.
Rogers adds that it’s “…clearly in the customer’s best interest to enable them to get the help they need from their insurer, to help them understand the appropriateness and affordability of their cover, and some key guardrails will help ensure consumers are protected.”
““In instances where the customer no longer has an adviser,…”
There is a simple remedy none of the insurers apply: Appoint an adviser for their policy and pay the commission applicable. Fire those advisers who were assigned and don’t do their job.
Spot on “Business”. In years gone by, these clients that didn’t have an adviser were called “örphan policy holders”, and they were allocated to advisers by the life companies that lived around the same area. This seemed to work well most importantly for the client, and the client’s business was retained with the insurer. Today there are hundreds of thousands of orphan policy holders within the life companies getting no advice and is one of the reasons for the shortfall in the clients owning sufficient amounts of the RIGHT type of insurances.
The three hazards of life are still the same as they have always been: “Dying too soon, Living too long, and suffering a disability or critical illness along the way.” The adviser is there to fill the Needs in these three important areas. It’s not rocket science!
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