![\"AFA](\"https:\/\/riskinfo.com.au\/news\/files\/2015\/06\/Brad-Fox-2.jpg\")
<\/a>The specific areas of concern relate to Section 7.7A.16H of the Corporations Amendment (Life Insurance Remuneration Arrangements) Regulation 2016<\/em>\u00a0(see below) which AFA Chief Executive, Brad Fox<\/strong> said appears to offer carve-outs for employed financial advisers of an Australian Financial Services Licensee (AFSL) but not for self-employed advisers.<\/p>\n Fox said the AFA\u2019s assessment of Section 7.7A.16H was that it could create a carve-out for employed advisers of an AFSL to receive pre-reform commissions for at least a year, or even longer, under current workplace agreements or employment contracts.<\/p>\n In the consensus reached with the Minister it was clear that direct sales channels were to be included in the application of the reforms…<\/p><\/blockquote>\n At the same time the draft regulations would also appear to exclude employees of an AFSL from the two-year clawback provisions that would apply to self-employed advisers.<\/p>\n Fox said the outcome of the loopholes could mean that banks and insurers with employees or adviser sales forces in direct and retail insurance are exempt from the reforms for the term of their existing employment and collective bargaining agreements.<\/p>\n \u201cIn the consensus reached with the Minister it was clear that direct sales channels were to be included in the application of the reforms. On this basis the draft regulations can be relatively easily corrected and we are working this through with Treasury,\u201d Fox said.<\/p>\n \u201cThe AFA is committed to ensuring that the final regulations do not support carve-outs that disadvantage self-employed financial advisers and small business practices,\u201d he said, adding that the AFA is continuing to scrutinise the regulations during the consultation period provided by Treasury until to 28 April.<\/p>\n Corporations Amendment (Life Insurance Remuneration Arrangements) Regulation 2016<\/strong><\/p>\n Section 7.7A.16H – Employee arrangements<\/strong> Benefits paid under an enterprise agreement<\/em><\/p>\n (2) The amendments made by Schedule 1 to the Corporations Amendment (Life Insurance Remuneration Arrangements) Act 2016 do not apply to a benefit paid to a financial services licensee, or a representative of a financial services licensee, in relation to a life risk insurance product, or life risk insurance products, if:<\/p>\n (a) the benefit is paid under a remuneration arrangement between an employer and an employee; and<\/p>\n (b) the benefit is paid in accordance with an enterprise agreement (including its associated documents), or a collective agreement-based transitional instrument (including its associated documents), that was entered into before the commencement day; and<\/p>\n (c) the agreement or instrument was in force immediately before the commencement day; and<\/p>\n (d) either:<\/p>\n (i) if the nominal expiry date of the agreement or instrument has not passed before the commencement day\u2014the benefit is paid within 6 months after the nominal expiry date for the agreement; or<\/p>\n (ii) if the nominal expiry date of the agreement or instrument passes before the commencement day\u2014the benefit is paid before the transition day.<\/p>\n <\/p>\n Benefits paid under another form of remuneration arrangement<\/em><\/p>\n (3) The amendments made by Schedule 1 to the Corporations Amendment (Life Insurance Remuneration Arrangements) Act 2016 do not apply to a benefit paid to a financial services licensee, or a representative of a financial services licensee, in relation to a life risk insurance product, or life risk insurance products, if:<\/p>\n (a) the benefit is paid under a remuneration arrangement between an employer and an employee; and<\/p>\n (b) the remuneration arrangement was in existence immediately before the commencement day; and<\/p>\n (c) the benefit is not paid in accordance with an enterprise agreement (including its associated documents), or a collective agreement-based transitional instrument (including its associated documents); and<\/p>\n (d) the benefit is payable in relation to a period that ends before the transition day.<\/p>\n <\/p>\n (4) In this regulation:<\/p>\n nominal expiry date<\/em> in relation to a collective agreement-based transitional instrument means:<\/p>\n (a) if there is a nominal expiry date for the instrument\u2014that date; and<\/p>\n (b) if there is no nominal expiry date for the instrument\u2014the last day of the period of the agreement.<\/p>\n","protected":false},"excerpt":{"rendered":" Questions have been raised about the presence of potential loopholes around commissions and clawbacks for employed financial advisers contained within the draft regulations for the Life Insurance Framework (LIF).<\/p>\n","protected":false},"author":3,"featured_media":33066,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[259,8,270],"tags":[4247],"class_list":["post-33009","post","type-post","status-publish","format-standard","has-post-thumbnail","category-breaking","category-compliance-regulation","category-remuneration","tag-feature","headers-new"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/33009","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=33009"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/33009\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/33066"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=33009"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=33009"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=33009"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n(1) This regulation is made for subsection 1549B(3) of the Act.<\/p>\n