A\u00a0meeting of\u00a0senior industry advisers and\u00a0life company managers has raised the\u00a0prospect of restricting adviser remuneration on renewal life insurance business to level commission only.<\/p>\n
This topic was one of a number of key issues discussed at the recent Million Dollar Round Table (MDRT) insurance industry meeting in Sydney, and forms the\u00a0basis of our latest riskinfo poll, which asks:<\/p>\n
Should adviser remuneration on replacement life insurance business be restricted to\u00a0level commission only?<\/em><\/strong><\/p>\nThe\u00a0argument in support of restricting adviser\u00a0 remuneration on replacement policies to level commission only relates to discouraging the unnecessary movement of life insurance policies for motives other than what may be considered in the best interests of the client (ie to restrict the practice of ‘churning’).<\/p>\nThere exists a small\u00a0percentage of\u00a0advisers who ‘churn’ life policies after the original responsibility period has ended in order to access another round of upfront commission on effectively the same business.<\/p>\nthis practice … can potentially lead to rejected future claims<\/h6>\nIn addition to not being in the best interests of the client, this practice also reduces the average term of life insurance policies and can potentially lead to rejected future claims due to non-disclosure occurring during\u00a0the replacement policy application process.<\/p>\nOn the other hand, it was noted that within the general insurance industry, the practice of churning policies continues, even though all general insurance\u00a0remuneration is paid on a level commission basis.<\/p>\nNaturally, there are many instances where it is<\/span> in the best\u00a0interests of the client to change their insurance policies, due to changed employment circumstances or product innovations or changed personal circumstances.<\/p>\nShould advisers who are providing this service for their clients then be restricted in their remuneration options simply because the new policy replaces an existing contract?<\/p>\nWhat is your view?\u00a0 Should only level commission be paid on replacement insurance policies in order to dampen the incidence of churning?<\/p>\nOr does this penalise the majority of advisers who prefer upfront commission remuneration models, who are simply acting in their clients best interests by changing their policies?<\/p>\n<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"A\u00a0meeting of\u00a0senior industry advisers and\u00a0life company managers has raised the\u00a0prospect of restricting adviser remuneration on renewal life insurance business to level commission only.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,270],"tags":[],"class_list":["post-3409","post","type-post","status-publish","format-standard","category-polls","category-remuneration","headers-new"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/3409","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=3409"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/3409\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=3409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=3409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=3409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
The\u00a0argument in support of restricting adviser\u00a0 remuneration on replacement policies to level commission only relates to discouraging the unnecessary movement of life insurance policies for motives other than what may be considered in the best interests of the client (ie to restrict the practice of ‘churning’).<\/p>\n
There exists a small\u00a0percentage of\u00a0advisers who ‘churn’ life policies after the original responsibility period has ended in order to access another round of upfront commission on effectively the same business.<\/p>\n
In addition to not being in the best interests of the client, this practice also reduces the average term of life insurance policies and can potentially lead to rejected future claims due to non-disclosure occurring during\u00a0the replacement policy application process.<\/p>\n
On the other hand, it was noted that within the general insurance industry, the practice of churning policies continues, even though all general insurance\u00a0remuneration is paid on a level commission basis.<\/p>\n
Naturally, there are many instances where it is<\/span> in the best\u00a0interests of the client to change their insurance policies, due to changed employment circumstances or product innovations or changed personal circumstances.<\/p>\nShould advisers who are providing this service for their clients then be restricted in their remuneration options simply because the new policy replaces an existing contract?<\/p>\nWhat is your view?\u00a0 Should only level commission be paid on replacement insurance policies in order to dampen the incidence of churning?<\/p>\nOr does this penalise the majority of advisers who prefer upfront commission remuneration models, who are simply acting in their clients best interests by changing their policies?<\/p>\n<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"A\u00a0meeting of\u00a0senior industry advisers and\u00a0life company managers has raised the\u00a0prospect of restricting adviser remuneration on renewal life insurance business to level commission only.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,270],"tags":[],"class_list":["post-3409","post","type-post","status-publish","format-standard","category-polls","category-remuneration","headers-new"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/3409","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=3409"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/3409\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=3409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=3409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=3409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
Should advisers who are providing this service for their clients then be restricted in their remuneration options simply because the new policy replaces an existing contract?<\/p>\n
What is your view?\u00a0 Should only level commission be paid on replacement insurance policies in order to dampen the incidence of churning?<\/p>\n
Or does this penalise the majority of advisers who prefer upfront commission remuneration models, who are simply acting in their clients best interests by changing their policies?<\/p>\n
<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"A\u00a0meeting of\u00a0senior industry advisers and\u00a0life company managers has raised the\u00a0prospect of restricting adviser remuneration on renewal life insurance business to level commission only.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,270],"tags":[],"class_list":["post-3409","post","type-post","status-publish","format-standard","category-polls","category-remuneration","headers-new"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/3409","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=3409"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/3409\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=3409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=3409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=3409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
A\u00a0meeting of\u00a0senior industry advisers and\u00a0life company managers has raised the\u00a0prospect of restricting adviser remuneration on renewal life insurance business to level commission only.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,270],"tags":[],"class_list":["post-3409","post","type-post","status-publish","format-standard","category-polls","category-remuneration","headers-new"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/3409","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=3409"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/3409\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=3409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=3409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=3409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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