{"id":7052,"date":"2010-07-14T02:19:39","date_gmt":"2010-07-13T16:19:39","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=7052"},"modified":"2025-09-02T11:34:58","modified_gmt":"2025-09-02T01:34:58","slug":"impact-of-banning-risk-commissions-in-super-advisers-have-their-say","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2010\/07\/14\/impact-of-banning-risk-commissions-in-super-advisers-have-their-say\/","title":{"rendered":"Banning Risk Commissions in Super – Impact on Premiums"},"content":{"rendered":"

\"Vote<\/a><\/p>\n

What will be the impact on insurance premiums if\u00a0risk commissions in superannuation\u00a0are banned?<\/p>\n

Early adviser responses to the Cooper Review recommendation to ban\u00a0risk commissions in super, suggest there will be a substantial and adverse impact on\u00a0consumers, advice practices, \u00a0tax payers and social welfare payments.<\/p>\n

All of these areas, such as the impact on the viability of\u00a0many advice practices,\u00a0are important and will be addressed in forthcoming polls.\u00a0 But the focus of\u00a0this poll question is concerned with the potential impact that a banning of risk commissions in super may have on the cost of insurance.\u00a0 Our question is:<\/p>\n

Will banning risk commissions in superannuation\u00a0lead to lower insurance premiums?<\/em><\/strong><\/p>\n

To recap:<\/p>\n

Cooper Review Panel Recommendation 5.12 reads:<\/p>\n

Up\u2010front and trailing commissions and similar payments should be prohibited in respect of any insurance offered to any superannuation entity…<\/em><\/p>\n

The Panel’s reasoning behind this recommendation is based on the contention that commissions form a meaningful component of an insurance premium.<\/p>\n

Logically, if commissions are removed from the premium, insurance costs should be cheaper and\u00a0superannuation account values will increase because a greater proportion of the super contribution will be invested, rather than\u00a0spent on insurance.<\/p>\n

Premiums on existing retail life insurance products can reduce by around 35% if the adviser dials commission down to zero, while level commissions on group risk products\u00a0typically load the base premiums by around 15% – 20%.<\/p>\n

But\u00a0in reality, would premiums reduce by these levels if risk commissions in super are banned?<\/p>\n

Even though they are in a competitive environment, could life companies see this as\u00a0an opportunity to extend their profit margins, as some have suggested?\u00a0 Meanwhile, others point out that if a risk adviser is placed on a salary by a bank or industry fund,\u00a0the company still needs to account for that salary expense within the premiums that are eventually paid\u00a0by the member.<\/p>\n

Likewise, if superannuation trustees ‘import’ insurance advice for their members, there will naturally be a\u00a0cost for\u00a0that advice which must somehow be paid.<\/p>\n

What is your view?\u00a0 Will banning risk commissions in super bring down insurance premiums a little or a lot, or not at all?\u00a0 Will the superannuation member ultimately be better off, or will they pay elsewhere?<\/p>\n

Let us know what you think…<\/p>\n

\"Vote<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

What will be the impact on insurance premiums if\u00a0risk commissions in superannuation\u00a0are banned?<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8294,8,49,270],"tags":[],"class_list":{"0":"post-7052","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-claims","7":"category-compliance-regulation","8":"category-polls","9":"category-remuneration"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/7052","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=7052"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/7052\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=7052"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=7052"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=7052"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}