{"id":30053,"date":"2015-06-30T15:16:23","date_gmt":"2015-06-30T05:16:23","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=30053"},"modified":"2015-07-01T07:32:52","modified_gmt":"2015-06-30T21:32:52","slug":"new-life-insurance-framework-your-say","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2015\/06\/30\/new-life-insurance-framework-your-say\/","title":{"rendered":"New Life Insurance Framework &#8211; Your Say"},"content":{"rendered":"<div id=\"polls-145\" class=\"wp-polls\">\n\t\t<div class=\"pollHeader\"><strong>Could your advice business successfully operate under the remuneration proposals outlined in the New Life Insurance Framework?<\/strong><\/div><div id=\"polls-145-ans\" class=\"wp-polls-ans\"><ul class=\"wp-polls-ul\">\n\t\t<li>Yes - but I don't support the remuneration proposals <small>(37%)<\/small><div class=\"pollbar\" style=\"width: 37%\" title=\"Yes - but I don't support the remuneration proposals (37% | 134 Votes)\"><\/div><\/li>\n\t\t<li>No <small>(36%)<\/small><div class=\"pollbar\" style=\"width: 36%\" title=\"No (36% | 132 Votes)\"><\/div><\/li>\n\t\t<li>Not sure <small>(15%)<\/small><div class=\"pollbar\" style=\"width: 15%\" title=\"Not sure (15% | 56 Votes)\"><\/div><\/li>\n\t\t<li>Yes - and I support these remuneration proposals <small>(12%)<\/small><div class=\"pollbar\" style=\"width: 12%\" title=\"Yes - and I support these remuneration proposals (12% | 45 Votes)\"><\/div><\/li>\n\t\t<\/ul><div style=\"text-align: center\"><\/div><\/div>\n\t\t<input type=\"hidden\" id=\"poll_145_nonce\" name=\"wp-polls-nonce\" value=\"923daafe02\" \/>\n<\/div>\n\n<p>Our latest poll asks you to consider the compromise Life Insurance Framework remuneration package of proposals, and whether it will it work for your business.<\/p>\n<p><!--more-->This is a critical moment for risk-focussed financial advisers, for whom ASIC has estimated 80 per cent presently operate under the existing upfront commission remuneration structure.<\/p>\n<p>We have already received a significant volume of your comments, many of which reject the compromise package proposed by the AFA, FPA and FSC, but which has been supported by Assistant Treasurer, <strong>Josh Frydenberg<\/strong> (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2015\/06\/25\/new-life-insurance-framework-announced\/\">New Life Insurance Framework Announced<\/a>).<\/p>\n<p>For this poll, we\u2019re asking you to tell us whether your advice practice can successfully conduct business under the proposed model, irrespective of whether you agree with the proposal.<\/p>\n<p>One of the most outspoken supporters of the risk adviser position during the FoFA and Trowbridge debates has been Synchron Director, <strong>Don Trapnell<\/strong>, who has noted the new Framework could have been less accommodating for existing advisers. He noted the Framework &#8220;&#8230; is nowhere near as bad as it could have been for advisers or for consumers.&#8221;<\/p>\n<p>A less \u2018friendly\u2019 proposal from the adviser perspective might have included:<\/p>\n<ul>\n<li>20 per cent level commissions only, plus a capped $1,200 Initial Advice Payment<\/li>\n<li>Banning all risk commissions<\/li>\n<li>Only a two year transition to the new package<\/li>\n<li>The clawback structure proposed by the FSC in 2012 of 100% in year one, 75% in year two and 50% in year three (versus the proposed 100%\/60%\/30%)<\/li>\n<li>Zero commission for replacement policies inside the first five years, as proposed in the Trowbridge Reform model<\/li>\n<li>Payment on a per-client basis, not per-policy<\/li>\n<\/ul>\n<p>While these elements will not need to be considered, at least for the time being, the following Life Insurance Framework proposals will:<\/p>\n<ul>\n<li>Maximum total upfront commission of 60 per cent of the premium in the first year of the policy, from 1 July 2018<\/li>\n<li>Maximum ongoing commission of 20 per cent of the premium in all subsequent years from 1 January 2016<\/li>\n<li>Three year retention (\u2018clawback\u2019) period, to commence from 1 January 2016 to apply as follows:\n<ul>\n<li>in the first year of the policy, to 100 per cent of the commission on the first year\u2019s premium<\/li>\n<li>in the second year of the policy, to 60 per cent of the commission on the first year\u2019s premium<\/li>\n<li>in the third year of the policy, to 30 per cent of the commission on the first year\u2019s premium<\/li>\n<\/ul>\n<\/li>\n<li>Ban on other volume-based payments from 1 July 2016, with appropriate grandfathering arrangements, consistent with the Future of Financial Advice laws<\/li>\n<li>Life insurance companies to offer fee-for-service insurance products to support advisers who wish to operate on a fee-for-service basis<\/li>\n<\/ul>\n<p>The important transitional arrangements include:<\/p>\n<ul>\n<li>Maximum total upfront commission of 80 per cent of the premium in the first year of the policy from 1 January 2016<\/li>\n<li>Maximum total upfront commission of 70 per cent of the premium in the first year of the policy from 1 July 2017<\/li>\n<li>Maximum total upfront commission of 60 per cent of the premium in the first year of the policy from 1 July 2018<\/li>\n<\/ul>\n<p>Our poll question falls into the category of being a simple one to ask, but potentially a very difficult question to answer. As always, we seek your views and your comments that we hope and trust will contribute to this critically-important and ongoing debate\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Our latest poll asks you to consider the compromise Life Insurance Framework remuneration package of proposals, and whether it will it work for your business.<\/p>\n","protected":false},"author":3,"featured_media":30103,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,49,270],"tags":[4247],"class_list":["post-30053","post","type-post","status-publish","format-standard","has-post-thumbnail","category-compliance-regulation","category-polls","category-remuneration","tag-feature"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/30053","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=30053"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/30053\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/30103"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=30053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=30053"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=30053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}