In one of\u00a0the first\u00a0public comments to be made by an individual life insurance company since the Financial Services Council (FSC) announced its new Insurance Framework, Zurich will shortly issue a statement to advisers outlining its position on insurance commissions and responsibility periods.<\/p>\n
The insurer will tell advisers that commissions are crucial to ensuring the affordability of risk insurance, and fundamental to alleviating Australia’s underinsurance problem.<\/p>\n
A preview of the statement has been \u00a0provided to riskinfo, in which Zurich reiterates that it vigorously argued against the ban on life insurance commissions initially proposed under FoFA, and that commissions are crucial to ensuring risk advice is as affordable as possible, and available to as wide a range of consumers as possible.<\/p>\n
In addition, Zurich says it does not support any framework that reduces the ability of advisers to choose the remuneration model that best suits their business.<\/p>\n
‘In this context we believe an adviser’s decision to operate on a fee for service basis should be driven by consumer demand and the preferences of that individual adviser, rather than being forced upon them either by legislative or other external means,’ Zurich states.<\/p>\n
A spokesperson for Zurich said the group wanted to reassure advisers it would continue to be actively involved in discussions with the FSC.<\/p>\n
“Zurich has already demonstrated its commitment to advisers by taking an active role in the Future of Financial Advice (FoFA) reforms debate, and other key regulatory issues which have emerged over the past 18 months.\u00a0 We will absolutely continue to work with the FSC to ensure advisers’ voices are heard on what is a significant issue for our industry,” the spokesperson said.<\/p>\n
The insurer has previously framed what it called a ‘comprehensive response’ to the FSC’s initial proposal.\u00a0 As an alternative to the original recommendations by the Council, Zurich said its preferred approach was to deal individually with the very small number of advisers who abuse the system.<\/p>\n