{"id":36156,"date":"2017-02-28T12:20:20","date_gmt":"2017-02-28T01:20:20","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=36156"},"modified":"2025-09-02T11:34:01","modified_gmt":"2025-09-02T01:34:01","slug":"doubts-raised-around-direct-life-contracts","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2017\/02\/28\/doubts-raised-around-direct-life-contracts\/","title":{"rendered":"Doubts Raised Around Direct Life Contracts"},"content":{"rendered":"

Direct life insurance may come under review by the Australian Competition and Consumer Commission (ACCC) after it was the centre of discussions between the Association of Financial Advisers (AFA) and a Parliamentary Joint Committee (PJC).<\/p>\n

\"Nationals<\/a>
Nationals Senator for NSW, John Williams<\/figcaption><\/figure>\n

Speaking at the public hearing of the PJC Inquiry into Life Insurance in Sydney last week, the AFA raised concerns about the lack of underwriting at time of application within direct insurance and the ability of direct insurers to retroactively underwrite a policy holder at time of claim.<\/p>\n

Responding to a question from PJC member Jason Falinski<\/strong>, MP as to whether direct insurance policies were flawed as contracts, AFA Chief Executive, Brad Fox<\/strong> stated it was not the policy but the ability of direct insurers to work through a claimant\u2019s medical history that was the problem.<\/p>\n

\u201cIf the contract did not have ability to exclude pre-existing conditions, it would be a good contract and consumers would be covered for what they think they are covered for, but because of the ability to go back and underwrite from the time someone started to buy the policy, and even years before, consumers are not aware they may not be covered,\u201d Fox said.<\/p>\n

\u201cMany consumers would not know…what an underwriter would class as serious or not serious…”<\/h6>\n

Falinksi also questioned whether consumers were aware of the need to disclose information at time of application, despite not knowing what they should disclose, to which Fox responded that most consumers would not know what an insurer considered as relevant for the purposes of disclosure.<\/p>\n

\u201cMany consumers would not know or it would not be fair to expect them to know what an underwriter would class as serious or not serious. Most people would not feel they would have to declare some issues if they no longer suffered from them or had recovered from them in the past,\u201d Fox said.<\/p>\n

\u201cIt would be much better if we provide underwriting up front than leave a gap of interpretation. It should not be permissible to bypass underwriting at commencement of a policy but instigate it at time of claim,\u201d Fox said.<\/p>\n

While Fox would not be drawn on a question from PJC member Matt Keogh<\/strong>, MP of whether direct life insurance adverts which offer cover on the basis of a few questions were \u201cwholly misleading\u201d fellow PJC member Senator John Williams<\/strong> stated \u201c\u2026it was worth the ACCC looking at if they are false and misleading and is something we can discuss in our recommendations.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Direct life insurance may come under review by the Australian Competition and Consumer Commission (ACCC) after it was the centre of discussions between the Association of Financial Advisers (AFA) and a Parliamentary Joint Committee (PJC).<\/p>\n","protected":false},"author":3,"featured_media":36172,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8294,8,4],"tags":[4247],"class_list":["post-36156","post","type-post","status-publish","format-standard","has-post-thumbnail","category-claims","category-compliance-regulation","category-products","tag-feature"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/36156","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=36156"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/36156\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/36172"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=36156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=36156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=36156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}