The Insurance Council of Australia (ICA) has opened dialogue with the Treasury over proposed Delivering Better Financial Outcomes reforms, which are part of the government’s initiative following the Quality of Advice review.
The ICA backed the reform’s goals, which are aimed at expanding access to financial advice for those with simpler financial needs and encouraging innovative ways to deliver this advice.
At a consultation roundtable on February 19, the ICA outlined its initial thoughts on how these reforms might impact the general insurance sector.
One of the primary points made was the intention to maintain a modified approach to the best interests duty (BID) for general insurance. This approach is in line with the existing framework, which the Treasury plans to keep largely intact.
The discussions also touched on certain areas where the ICA is eager to further collaborate with the Treasury, especially regarding the future direction of these reforms. The ICA is advocating for more precise legislative guidance to provide scaled or limited advice on general insurance, which would help address current uncertainties and enhance the framework for personal advice within the sector.
Regarding the introduction of a new category of advisors, the ICA expressed concerns about the proposed requirement for an AQF-5 diploma for those advising on general insurance. It argued that this requirement might not be feasible for staff in a typical mass-market contact centre setting and could restrict the availability of direct personal advice to consumers.
However, the ICA commended the clarity provided on the continued exemption of general insurance from the requirement to provide a Statement of Advice, seeing this as a positive step towards maintaining effective access to personal advice.
The ICA also recently shared its insights on climate-related financial disclosure draft legislation.
