{"id":34729,"date":"2016-09-27T22:00:35","date_gmt":"2016-09-27T12:00:35","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=34729"},"modified":"2025-09-02T11:34:32","modified_gmt":"2025-09-02T01:34:32","slug":"afa-calls-for-best-interest-lapses-to-be-clawback-exempt","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2016\/09\/27\/afa-calls-for-best-interest-lapses-to-be-clawback-exempt\/","title":{"rendered":"AFA Pushes For Clawback Exemption on Best Interest Lapses"},"content":{"rendered":"

The Association of Financial Advisers (AFA) will push for an exemption from clawback triggers in the event where a policy is cancelled in the best interests of a client, stating there was a need for a clearer distinction around lapses subject to clawback.<\/p>\n

\"AFA,<\/a>
AFA, General Manager, Policy & Professionalism, Samantha Clarke<\/figcaption><\/figure>\n

The Association has already raised the issue in submissions to Treasury and in further discussions with Government and is seeking to add the exemption to those already included in the Life Insurance Framework (LIF) draft legislation released before the last election.<\/p>\n

The legislation states that clawbacks would not apply in cases of age-expiry, self-harm, suicide and health improvement with the AFA stating advice in the best interest of a client that leads to a policy cancellation should not be considered a lapse subject to clawback.<\/p>\n

The Association is also seeking greater clarity between poor adviser behaviour, the actions of insurers and decisions made by clients without seeking advice.<\/p>\n

\u201cIt is imperative that cases of inappropriate advice must be clearly differentiated from policy cancellations caused by administrative errors, operational decisions of the insurers and subsequent choices made by an insured client acting independently of their adviser,\u201d AFA General Manager, Policy & Professionalism, Samantha Clarke<\/strong> stated in a recent article to AFA members.<\/p>\n

\u201cWe will continue to seek a common start date for all channels…because the integrity of the reforms requires it.\u201d<\/h6>\n

\u201cWe also recommend it is important to clearly define on whom a clawback obligation rests where ongoing commissions have been transferred to another adviser or licensee during the two-year clawback period,\u201d Clarke said.<\/p>\n

The lobbying on clawback is part of a wider push by the Association to create a level playing field between insurance channels and to head-off conditions within the legislation which would disadvantage advisers.<\/p>\n

This has included the Association pushing for non-aligned advice, employed advice and direct insurance channels to be covered by the legislation; a situation which was recently confirmed by the Minister for Revenue and Financial Services,\u00a0Kelly O\u2019Dwyer<\/strong> (See:\u00a0O\u2019Dwyer Confirms LIF Will Cover Direct Channels<\/a>)<\/p>\n

The AFA said the confusion around whether employed advice and direct channels would be covered by the new framework was due to a clause in the draft legislation which would have allowed the latter to be grandfathered in at a later date.<\/p>\n

\u201cThis was based on the grandfathering model within the Future of Financial Advice reforms, but no industry representatives actually sought that change,\u201d an AFA spokesperson said.<\/p>\n

\u201cWe will continue to seek a common start date for all channels and the application of a level playing field for all channels because the integrity of the reforms requires it.\u201d<\/p>\n

The AFA stated it was expecting the release of the final LIF legislation shortly and had been informed that Minister O\u2019Dwyer was keen to introduce the bill to Parliament as soon as possible.<\/p>\n

Note to Advisers:<\/em><\/strong><\/p>\n

We welcome your comments and in the interest of fairness, request that you properly identify yourself either in your post ID or at the end of each comment.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The Association of Financial Advisers (AFA) will push for an exemption from clawback triggers in the event where a policy is cancelled in the best interests of a client, stating there was a need for a clearer distinction around lapses subject to clawback.<\/p>\n","protected":false},"author":3,"featured_media":34769,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8294,8],"tags":[4247],"class_list":{"0":"post-34729","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-associations","8":"category-claims","9":"category-compliance-regulation","10":"tag-feature"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/34729","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=34729"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/34729\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/34769"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=34729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=34729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=34729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}