![\"Assistant](\"https:\/\/riskinfo.com.au\/news\/files\/2015\/11\/Kelly-ODwyer.jpg\")
<\/a>The Assistant Treasurer, Kelly O\u2019Dwyer<\/strong>, made the announcement late today stating the clawback provisions would be as follows:<\/p>\n Importantly, the Government has stated that base premium, policy fees and frequency loadings will be included in the calculation of the commission caps, with only government taxes to be excluded.<\/p>\n \u201cThe Government has responded to industry concerns about ongoing business viability by moving from a three to a two year clawback period. However, through these reforms we are ensuring that there are strong incentives to prevent replacement of policies where there is no consumer benefit,\u201d the Assistant Treasurer stated.<\/p>\n O\u2019Dwyer said the final shape of the LIF legislation will be released as a draft for consultation by the end of 2015, with final legislation to be introduced in early 2016.<\/p>\n Roles for ASIC and FSC<\/strong><\/p>\n The Assistant Treasurer also stated that ASIC and the Financial Services Council (FSC) will play key roles with ASIC to oversee the implementation and execution of the legislation and the FSC to create guidelines for insurers.<\/p>\n \u201cThe Government will amend the Corporations Act 2001 (Corporations Act) to give ASIC the power to create a legislative instrument to set caps on commissions and implement clawback arrangements. Ultimately, the final form of ASIC’s instrument will be a matter for ASIC, as the independent regulator,\u201d O\u2019Dwyer stated.<\/p>\n \u201cThe FSC will have responsibility for creating the Life Insurance Code of Practice. Similar to existing codes for Banking and General Insurance, the Code would set out best practice standards for insurers, including in relation to underwriting and claims management.\u201d<\/p>\n Approved product lists and remuneration will also come into sharper focus with O\u2019Dwyer stating that \u201cindustry will also have responsibility for widening Approved Product Lists through the development of a new industry standard\u201d.<\/p>\n \u201cI also intend to strengthen remuneration disclosure as part of a broader review by ASIC of life insurance Statements of Advice, including prominent upfront statements about commissions. The ASIC review of Statements of Advice will commence in the second half of 2016, with a view to making disclosure simpler and more effective for consumers as well as assisting advisers to make better use of these documents,\u201d O\u2019Dwyer said.<\/p>\n Recognition of efforts of AFA and FPA<\/strong><\/p>\n In announcing the change the Assistant Treasurer stated the \u201cindustry has come together to reach consensus on the implementation of important improvements to the remuneration arrangements in the life insurance advice sector\u201d.<\/p>\n O\u2019Dwyer highlighted the efforts of the Association of Financial Advisers (AFA), the Financial Planning Association (FPA) and the FSC in shaping the package on behalf of the wider life insurance industry stating \u201cthis package reflects the hard work of the industry over the past few weeks finalising implementation details\u201d.<\/p>\n The AFA said the clawback refinements would be \u2018received with relief by their members\u2019 with AFA National President, Deborah Kent accrediting the change to the combined efforts of the AFA and FPA, and to the collaborative approach of the Assistant Treasurer.<\/p>\n \u201cIn an electronic poll held at our recent National Adviser Conference in Cairns our Members indicated almost unanimously that three-year clawback was the greatest issue in the reforms. That was consistent with the view of our Board. To succeed in having this reduced to two years is a great relief for our members, particularly those that own and operate small businesses.\u201d<\/p>\n \u201cWe would like to acknowledge the support and engagement of the many AFA members that have been instrumental in assisting politicians to understand the intricacies of the issues involved. The voice of our members has been important to the debate,\u201d Kent said.<\/p>\n Other Key Measures Announced:<\/strong><\/p>\n\n