{"id":29426,"date":"2015-04-21T14:56:53","date_gmt":"2015-04-21T04:56:53","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=29426"},"modified":"2025-06-10T12:13:37","modified_gmt":"2025-06-10T01:13:37","slug":"liawg-failed-to-deliver-on-terms-of-reference","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2015\/04\/21\/liawg-failed-to-deliver-on-terms-of-reference\/","title":{"rendered":"LIAWG Failed to Deliver on Terms of Reference – AFA"},"content":{"rendered":"

AFA CEO Brad Fox<\/strong> has expressed his disappointment that the Life Insurance and Advice Working Group failed to deliver on its original Terms of Reference.<\/span><\/p>\n

<\/p>\n

Mr Fox said the AFA agreed to participate in the LIAWG in the hope the industry could work together to improve the quality of life insurance advice. But he believes the Working Group did not deliver on the original Terms of Reference agreed at the commencement of the process, and that the Trowbridge Report recommendations are \u201cunworkable\u201d.<\/p>\n

Convened in October 2014, mainly in response to ASIC’s damning Review of Retail Life Insurance Advice, the LIAWG was a joint initiative of the AFA and the Financial Services Council. Announcing the program, then FSC CEO, John Brogden<\/strong>, said: The financial advice and life insurance sectors will work together to carefully examine the findings and recommendations in the ASIC report and to assess all options to improve market practices and sustainability.\u201d<\/p>\n

\"AFA<\/a>
AFA CEO, Brad Fox<\/figcaption><\/figure>\n

The original LIAWG Terms of Reference stated:<\/p>\n

1 Objectives<\/strong><\/p>\n

The LIAWG will review ASIC\u2019s report and make recommendations on how the industry can respond to the issues identified to ensure that Australians are adequately insured and receive world class financial advice.<\/p>\n

2 Scope<\/strong><\/p>\n

The LIAWG will consider all options in its response including those which will be industry led and those which will require regulatory assistance.<\/p>\n

The LIAWG will:<\/p>\n

    \n
  • Provide a unified response to the identified issues;<\/li>\n<\/ul>\n
      \n
    • Address the three key issues arising from the report:<\/li>\n<\/ul>\n

      1. remuneration structures;<\/p>\n

      2. product design issues; and<\/p>\n

      3. quality of advice.<\/p>\n

      2.1 The LIAWG will provide specific analysis on the options and recommendations for industry change, including transitional paths.<\/p>\n

      3 Timing<\/strong><\/p>\n

      3.1 The Working Group will provide an interim report by 15 December 2014 and will report in early 2015.<\/p>\n

      4 Consultation<\/strong><\/p>\n

      4.1 The Working Group will consult with key industry stakeholders, consumer groups, regulators and the Parliament.<\/p>\n

      5 Support<\/strong><\/p>\n

      5.1 The Working Group will be supported by a Secretariat within the associations.<\/p>\n

      5.2 Membership The LIAWG will have an independent chair, and will include a mix of advice, practitioner, and insurance representatives drawn from the founding industry organisations, the AFA and the FSC.<\/p>\n

      By December 2014, when the LIAWG Interim Report was released, a strong emphasis was placed on the fact that the Interim Report and subsequent Final Report (eventually published in March 2015) would be the \u201cindependent recommendations\u201d of LIAWG Independent Chairman, John Trowbridge<\/strong>.<\/p>\n

      The FSC has also confirmed that the industry submissions made in response to the Interim Report were made available to its Chairman, but not to the other members of the LIAWG.<\/p>\n

      According to Mr Fox, the remuneration model proposed in the Trowbridge Report does not acknowledge the value life insurance advisers provide to consumers.<\/p>\n

      The proposals put forward are based on unsupported assumptions and inadequate research<\/h6>\n

      \u201cFor this market to be sustainable and for consumers to continue to access quality advice there must be a sensible balance between the interests of all parties,\u201d he said. \u201cThe proposals put forward are based on unsupported assumptions and inadequate research. There has been no independent assessment of the potential implications on consumers, financial advisers and licensees.\u201d<\/p>\n

      He argued that instead of focusing on adviser remuneration, the report should have looked to other levers to improve the quality of advice, such as training and education, codes of conduct and strategic life insurance advice.<\/p>\n

      Mr Fox also called on Australia\u2019s insurers to publicly release their submissions to Mr Trowbridge<\/p>\n

      \u201cWith the FSC submission to Trowbridge calling for such a significant change to adviser remuneration, the time has come to ensure that the life insurers are transparent about their case for this significant change,” said Mr Fox, who also said insurers should release modelling of the impact of the Trowbridge remuneration recommendations on consumers, advisers, licensees and life insurers. “We have released our submission and call on all other stakeholders to do the same,” said Mr Fox.<\/p>\n","protected":false},"excerpt":{"rendered":"

      AFA CEO Brad Fox has expressed his disappointment that the Life Insurance and Advice Working Group failed to deliver on its original Terms of Reference.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8,8282],"tags":[],"class_list":["post-29426","post","type-post","status-publish","format-standard","category-associations","category-compliance-regulation","category-government"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/29426","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\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=29426"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/29426\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=29426"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=29426"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=29426"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}