The Federal Government’s acceptance of 14 out of 22 recommendations from the Quality of Advice Review (QAR) has been hailed by a life insurer representative body as “a good start”, with more work to be done.
Life insurance companies and the Council of Australian Life Insurers (CALI) have welcomed reform, as has the national broker association. However, CALI urged the Government to prioritize legislation that improves access to affordable life insurance advice for a greater chunk of the Australian population.
"This announcement is a good start, but more needs to be done to help solve the unmet financial advice need for working Australians, not just those approaching retirement," said CALI CEO Christine Cupitt.
Cupitt emphasized the importance of ensuring informed choices and protecting workers and their families through life insurance. CALI also highlighted the issue of underinsurance, stressing the urgency to address this problem and protect individuals during difficult times. Government legislation should enable life insurers to provide limited advice directly to Australians, alongside appropriate limitations and strong consumer protections, CALI said.
Cupitt further expressed concern over the limited number of financial advisers available for life insurance guidance, making reforms in life insurance advice a pressing priority.
The National Insurance Brokers Association (NIBA) acknowledged “outstanding issues that are yet to be explored” in a press release that followed the government response. Nevertheless, it welcomed progress.
"Insurance brokers, through the implementation of the 2022 Insurance Brokers Code of Practice, have introduced measures to improve transparency and disclosure, and the government's response is fairly consistent with our approach," said NIBA CEO Philip Kewin.
NIBA said that it looks forward to working with the government to finalize implementation details and address the remaining recommendations.
"In what has been a sustained hard market where accessibility and affordability of insurance has been under pressure, brokers have continued to play an important role in assisting their clients," said NIBA President Gary Okely. "Today's announcement gives more surety around brokers ability to provide professional advice to their clients.”
Leadership at insurer TAL also highlighted the need for further work.
“TAL supports the announcements the government has made today to make it easier for financial advisers and superannuation funds to provide access to affordable, quality financial advice to their clients and members," said TAL Group CEO and Managing Director Brett Clark. "All Australians stand to benefit from improved access to quality and affordable advice, and TAL will continue to constructively engage with government and all stakeholders on important reform that would also permit life insurers to better meet their customers’ simple advice needs.
“We should not miss this opportunity to better support life insurance outcomes for customers.”
TAL and fellow life insurer Zurich both committed to working hand in hand with government on changes.
“Zurich welcomes the government’s response to the Quality of Advice Review and its commitment to prioritise reforms designed to remove inefficient regulation and documentation requirements on financial advisers,” a Zurich spokesperson said.
“We look forward to working with the government as it consults on subsequent streams of reform, including expanding access to quality and affordable advice beyond the superannuation sector.”
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