{"id":37662,"date":"2017-07-11T17:42:15","date_gmt":"2017-07-11T07:42:15","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=37662"},"modified":"2017-07-12T07:06:26","modified_gmt":"2017-07-11T21:06:26","slug":"latest-poll-should-insurers-notify-asic-on-churning","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2017\/07\/11\/latest-poll-should-insurers-notify-asic-on-churning\/","title":{"rendered":"Latest Poll &#8211; Should Insurers Notify ASIC on Churning?"},"content":{"rendered":"<div id=\"polls-184\" class=\"wp-polls\">\n\t\t<div class=\"pollHeader\"><strong>Should insurers be required to report churning activity to ASIC?<\/strong><\/div><div id=\"polls-184-ans\" class=\"wp-polls-ans\"><ul class=\"wp-polls-ul\">\n\t\t<li>Yes <small>(72%)<\/small><div class=\"pollbar\" style=\"width: 72%\" title=\"Yes (72% | 152 Votes)\"><\/div><\/li>\n\t\t<li>No <small>(19%)<\/small><div class=\"pollbar\" style=\"width: 19%\" title=\"No (19% | 40 Votes)\"><\/div><\/li>\n\t\t<li>Not sure <small>(9%)<\/small><div class=\"pollbar\" style=\"width: 9%\" title=\"Not sure (9% | 18 Votes)\"><\/div><\/li>\n\t\t<\/ul><div style=\"text-align: center\"><\/div><\/div>\n\t\t<input type=\"hidden\" id=\"poll_184_nonce\" name=\"wp-polls-nonce\" value=\"6ab83dbdec\" \/>\n<\/div>\n\n<p>Our latest poll seeks your input on whether your peers should be held to a more rigorous process of accountability in relation to churning practices.<\/p>\n<p><!--more-->We wrote last week that ASIC had admitted to a Federal Government inquiry that some life companies were aware of which advisers have been churning life insurance policies (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2017\/07\/04\/asic-tells-pjc-insurers-were-aware-of-churn\/\" target=\"_blank\">ASIC Claims Some Insurers Were Aware of Churning<\/a>).<\/p>\n<p>Adviser reaction to our story was swift and generally critical that more has not been done by the insurers to identify and penalise proven churners. While insurers have taken unofficial, self-regulatory action to address churning (eg restricting known churners to level commissions only on new or replacement business cases, or refusing to accept any new business from some advisers), there has never existed a formal process of identification and potential notification.<\/p>\n<p>Have we arrived at a point at which the industry should consider setting activity benchmarks, above which insurers would be required to notify ASIC of suspect churning behaviour?<\/p>\n<p>Using a comprehensive study of the New Zealand market as a starting point, the NZ Financial Markets Authority defined a high rate of replacement busines as when at least 12% of an adviser&#8217;s policies lapsed in one year and the adviser wrote corresponding levels of new business in the same period. It also included when at least 40 policies lapsed in a single month and the adviser wrote the same level of new business in the same month (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2016\/07\/05\/33740\/\" target=\"_blank\">NZ regulator Claims Churn a Minor Problem<\/a>).<\/p>\n<h6>NZ regulators preferred &#8230;to monitor activity spikes through comprehensive &#8230;analysis of adviser behaviour<\/h6>\n<p>Would you support an Australian version of this regulatory benchmark?<\/p>\n<p>As we observed last year when reporting New Zealand&#8217;s approach to life insurance advice reform, the NZ path involves less prescriptive solutions when compared with Australia&#8217;s Life Insurance Framework reform legislation, in which NZ regulators preferred rather to monitor activity spikes through comprehensive and ongoing analysis of adviser behaviour.<\/p>\n<p>Ironically, much of the motivation suporting the implementation of the Life Insurance Framework remuneration reforms is based on the aim of removing or severely restricting conflicted remuneration in order to protect the consumer. But perhaps the same outcome could have been achieved in taking a more focussed approach of identifying and targeting those advisers who fail to adhere to reasonable replacement business levels.<\/p>\n<p>It&#8217;s over to you and we&#8217;ll report back next week&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Our latest poll seeks your input on whether your peers should be held to a more rigorous process of accountability in relation to churning practices.<\/p>\n","protected":false},"author":3,"featured_media":37688,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,49,270],"tags":[4247],"class_list":["post-37662","post","type-post","status-publish","format-standard","has-post-thumbnail","category-compliance-regulation","category-polls","category-remuneration","tag-feature"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/37662","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=37662"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/37662\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/37688"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=37662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=37662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=37662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}