We don’t want to compete with advisers say life insurers
The Council of Australian Life Insurers (CALI) has made clear that while life insurers want to be able to provide simple, product-specific advice they have no intention of competing with financial advisers.
CALI chief executive, Christine Cupitt has told a hearing of the Senate Economics Legislation Committee today that what the life insurers are proposing “will be very different to the role of financial advisers”.
“We only want to complement the important and valuable work they do, not get in the way,” she told the committee.
Cupitt said CALI is working with the Federal Government on the next tranche of the financial advice reforms and wants to see legislation that allows life insurers to provice simple advice on their own products, when customers ask them to.
“Of course, this should only happen with appropriate limitations and strong consumer protections,” she told the committee.
“We should not be turning people away when they ring our call centres. After all, giving simple answers to simple questions is basic customer service.”
“Of course, for people whose needs are more complicated, life insurers will continue to put them in contact with financial planners who can give them broader advice that compares products across the market,” Cupitt said.
Would any Adviser believe Cali and this lady ?
Seeing her speak earlier in year at a conference she told a completely different story.
Hard to believe anything Life Insurance Co’s say
You should be referring them to advisers not turning them away….. Product providers can give factual information nothing stopping you now. The fact they have to turn people away just shows what they are talking about is giving personal advice or leading to personal advice and they want way to do this without the current regulatory burden, which financial advisers and product issues have to follow.
What they are saying is we want special rules removing current consumer protections but advisers can’t do the same so we just want to sell products
We should trust the life offices shouldn’t we. They nailed LIF!!!
How about CALI encourage the cost viability of Life Insurance premiums and advice by aggressively lobbying for the remediation of LIF and then we won’t need to have this ridiculous debate at all.
CALI member companies sliding off a cliff with only a 1/3rd of the new business they experienced before Trowbridge recommended wrecking the industry. You’d think they’d be interested in renewed success and profit sustainability rather than babysitting run-off.
This is the answer. All they need to do is increase commissions to something sustainable for advice, and lower the compliance BS for advisers. Plenty of advisers there can help to make insurance great again!
Not just yet
Still a bit of juice in the lemon
It’s quite true that insurers’ in house sales reps won’t be competing with professional advisers. Due to the destructive actions of CALI members and regulators, there are hardly any professional advisers left who still provide insurance advice.
More vertical integration. The government really is a joke; just goes around in a full circle after causing mayhem in the industry.
It seems the Treasury, and ASIC don’t recognise that they are aiding and abetting vertical integration. At least not in life insurance, where they propose to let the life insurer fox into the consumer hen house, providing unqualified personal advice to bunnies in the spotlight
Yet this morning, the ACCC announced they were seriously looking at denying a proposed merge between Chemist Warehouse and a mob called Sigma Healthcare, a key wholesaler. The latter also runs a chain of retail chemist shops but also may have manufacturing facilities.
The ACCC say” The transaction may also weaken the competitiveness of the different product and services offered by Sigma’s banner pharmacies.” One wonders why the ACCC doesn’t have a look at the life insurance industry. Or have they ceded that particular power to ASIC, and we all know what they want. But the ACCC may have taken the hint from the terms of reference of the Hayne commission – vertical integration was never discussed, because the banks, who wrote the terms of reference, somehow forgot to mention the matter.
Competition for today’s life insurers are in fact life risk advisers: strong-minded, independent and self-employed advisers who, since LIF was introduced, no longer can have any volume based financial allegiances and special deals with any insurer, which is one of the few positives of LIF. Advisers who are always acting in the best interests of their clients are no longer able to play favourites with insurers, other than in underwriting outcomes.
Advisers are reducing in numbers rapidly and this step to allow insurers to provide personal advice will stimulate that exit
Anyone who thinks that the CEOs of these shareholder driven companies will be restricted in any way in the quantity of such advice they can provide to their customers has got rocks in the head. The members of CALI, who hand on heart are purporting to help consumers by seeking capacity to provide personal advice, have got just one thing in mind: to increase shareholder value and CEO bonuses, and ridding themselves of those nasty smelly advisers, who they’ve never liked
You nailed it Oldie – well said! I’ll just add that if life offices don’t soon get religion about ‘commissions UP & compliance DOWN’ there will be zero risk specialists left by EOFY 2026. Oh, and I’m talking about 100/20, not a cent less.
We have gone through hell and the end result might be significantly increased vertical integration ????
You couldn’t make this up.
Disgusting.
CALI seems to have an attitude of “were here from life insurance, and were here to help”
This is nothing but a grab for more secure revenue. Consider this situation: a policy 18 months into its two-year clawback period, has suddenly jumped 25% in the second year. Not unusual in today’s gouging environment.
The client can’t get hold of the adviser and rings the insurer. The insurer, desperate to recover the cost of maintaining a backpacker call centre, offers that client a another “similar” contract without underwriting for the same benefits for a 20% saving on premium.
How can they do that: easy, just introduce a few pre-existing condition exclusions, plus a couple of nasty rules relating to reinstating the policy after a lapse. Don’t believe me – have a look at the rubbish that was offered by St George a decade or so ago, issued by Westpac. I have one of those policies for those disbelievers.”
That’s the rubbish that we can expect to see dished out by our friends the life insurers and their gouging CEOs.
But wait there’s more! That is technically a lapse of a policy on the adviser. Hands up those who think that the adviser won’t cop a lapse and a six-month clawback.
And if you do think that won’t happen, then I’ve got a harbour bridge to sell you
CALI really are just self-serving price gougers. The more product they sell by in-house salaried sales people the less commission they have to pay on the same premium when compared to using an actual adviser. All about increasing profit than helping consumers.