{"id":13552,"date":"2011-12-06T16:56:54","date_gmt":"2011-12-06T06:56:54","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=13552"},"modified":"2021-04-15T10:20:43","modified_gmt":"2021-04-15T00:20:43","slug":"group-risk-commissions-outside-super-to-stay","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2011\/12\/06\/group-risk-commissions-outside-super-to-stay\/","title":{"rendered":"Group Risk Commissions Outside Super to Stay"},"content":{"rendered":"

Financial Services Minister Bill Shorten <\/strong>has confirmed that group risk commissions outside superannuation will\u00a0not be impacted by Future of Financial Advice (FoFA) reform measures.<\/p>\n

In an interview for the December 2011 edition of riskinfo Magazine, Minister Shorten clarified where group risk commissions\u00a0are positioned within the Government’s definition of conflicted remuneration.<\/p>\n

Responding to a question about the FoFA tranche 2 legislation not specifically excluding commissions from being paid on group risk products outside the superannuation environment, Mr Shorten said:<\/p>\n

“Yes, that is correct. That is consistent with my announcement in August this year that the ban on risk insurance commissions will apply to commissions on group life insurance in all superannuation products, and to commissions on any life insurance policies in a default or MySuper product from 1 July 2013.”<\/p>\n

Insurance commissions outside of super are not affected by the FoFA reforms<\/h6>\n

Mr Shorten then added: “Insurance commissions outside of super are not affected by the FoFA reforms.”<\/p>\n

Section 963A of the FoFA (tranche 2) legislation defines the term ‘conflicted remuneration’, while section 963B outlines what the Government considers not to be conflicted remuneration.\u00a0 An extract from this section reads:<\/p>\n

… a monetary benefit given to a financial services licensee, or a representative of a financial services licensee, who provides financial product advice to persons as retail clients is not conflicted remuneration in the circumstances set out in any of the following paragraphs:<\/em><\/p>\n

(a) the benefit is given to the licensee or representative solely in relation to a general insurance product;<\/em><\/p>\n

(b) the benefit is given to the licensee or representative solely in relation to a life risk insurance product, other than:<\/em><\/p>\n

(i) a group life policy for members of a superannuation entity (see subsection (2)); or<\/em><\/p>\n

(ii) a life policy for a member of a default superannuation fund.<\/em><\/p>\n

In other words, risk commissions are banned for all group risk\u00a0policies inside super and all policies in super default funds.\u00a0 Mr Shorten’s comments confirm that group risk commissions outside superannuation are\u00a0not considered conflicted remuneration and will remain available as a remuneration option for financial advisers.<\/p>\n

Click here<\/a>\u00a0to access the full wording of the second tranche of the FoFA legislation introduced into the House of Representatives on 24 November 2011.\u00a0 Clauses 963A and 963B can be found on pages 19 and 20.<\/p>\n","protected":false},"excerpt":{"rendered":"

Financial Services Minister Bill Shorten has confirmed that group risk commissions outside superannuation will\u00a0not be impacted by Future of Financial Advice (FoFA) reform measures.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,270],"tags":[],"class_list":["post-13552","post","type-post","status-publish","format-standard","category-compliance-regulation","category-remuneration"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/13552","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=13552"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/13552\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=13552"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=13552"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=13552"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}