{"id":68615,"date":"2023-11-14T11:35:57","date_gmt":"2023-11-14T01:35:57","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=68615"},"modified":"2025-03-14T12:02:22","modified_gmt":"2025-03-14T01:02:22","slug":"risk-commissions-enshrined","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2023\/11\/14\/risk-commissions-enshrined\/","title":{"rendered":"Risk Commissions Enshrined"},"content":{"rendered":"\n
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The news that the retention of risk commissions is included in the draft legislation delivering the first tranche of the QoA Review recommendations drew strong reader interest this week…<\/h3>\n<\/div>\n<\/div>\n

The retention of risk commissions at current levels is included in the draft legislation delivering the first tranche of the QoA Review recommendations.<\/p>\n

The\u00a0Delivering Better Financial Outcomes<\/a> package of reforms, which has been released for consultation on Treasury’s website this week, includes the QoA Review Recommendation, 13.7 on life insurance.<\/p>\n

This recommends retaining \u201c..the exception to the ban on conflicted remuneration for benefits given in connection\u2026 with the sale of a life risk insurance product,\u201d\u00a0 adding that commission and clawback rates should be maintained at current levels (see: QoA Review Decisions – Risk Commissions Retained<\/a>).<\/p>\n

In welcoming the draft legislation, FAAA chief Sarah Abood<\/strong>, notes that a piece of important news \u201c\u2026is confirmation that commissions on life insurance …can continue to be paid to advisers, with a one-off written consent from the client before the beginning of the policy.\u201d<\/p>\n

In the Exposure Draft Explanatory Materials<\/a> attached to the draft legislation the Government notes the objective of Recommendation 13.7 is to assist consumers to access personal advice about life insurance in order to obtain the type and amount of cover that meets their objectives, needs and circumstances. Interestingly, it adds:<\/p>\n

…over time commissions will play a lesser role<\/p><\/blockquote>\n

“The intention is that the other recommendations will encourage more providers to offer to provide life insurance advice for a fee paid by the client and that over time commissions will play a lesser role in the distribution of life insurance.”<\/p>\n

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Source: Exposure Draft Explanatory Materials, Treasury Laws Amendment (2024 Measures No. 1) Bill 2024<\/figcaption><\/figure>\n

\u00a0<\/span>The Treasury outlines that the draft legislation it has just released responds to several recommendations of the QoA Review, including:<\/p>\n