AIOFP boss recommends Zurich boycott

Mike Taylor

Managing Editor and Publisher

31 March 2026

The Association of Independently Owned Financial Professionals (AIOFP) is recommending to members that they boycott the use of products from major insurer, Zurich, until a dispute over the reclassification of some policy terms is resolved.

AIOFP executive director, Peter Johnston has written to members of his organisation recommending the boycott citing “poor behaviour by Zurich Life”.

In doing so, he claimed that Zurich had “decided to retrospectively [and without notice or consultation] increase the premium 4 times on Life Policies I-Extend” and suggested this has been occurred “with the obvious intention of destroying the policy”.

While recommending the boycott, the AIOFP acknowledged that the precise legal basis for Zurich’s actions remained to be fully established but claimed that on the available evidence the company’s position is problematic.

For its part, Zurich explained its position with a spokesperson stating, “Policies in this new risk class represent a higher risk than the broader portfolio due to the altered policy ownership and funding structure, as well as the higher average mortality rate for these policyholders”.

“This change has been introduced to support the long-term sustainability of Zurich’s portfolio by reflecting the increased risk associated with these policies,” the spokesperson said.

In a more detailed explanation, Johnston’s message to members state: “It has come to the AIOFP’s attention that Zurich/Onepath Australia Limited has taken steps that appear to involve the retrospective reclassification of in-force term life insurance policyholders, by creating what has been characterised as a ‘Death Cover Class’ with a higher-risk premium category”.

The explanation claimed “the policyholders affected are those whose policies are co-owned through an arrangement involving iExtend, a licensed, adviser-referred, fully disclosed premium continuation product.

“iExtend enables policyholders who can no longer independently sustain their life insurance premiums, due to health deterioration and often financial pressure that frequently accompanies it to maintain their existing cover through a structured co-ownership arrangement with Perpetual Nominees acting as custodian trustee.

“These policyholders entered into their original insurance contracts in good faith. They maintained their premiums in good faith. They sought professional advice and engaged a licensed product to protect cover they had built over years. The arrangement is lawful. The advice and adviser relationship was appropriate. The insurer accepted the premium without objection,” the AIOFP document said.

“When an insurer retrospectively alters how an existing policy is treated, after advice has been given, after risk has been accepted and after premiums have been paid strikes at the foundation of trust. Not only trust in advisers, but trust in the insurance system itself. Consumers affected by these decisions are not abstract policy numbers. They are people who followed the rules. They sought advice,” it said.

It went on to state: “This issue cannot be dismissed as a commercial disagreement between businesses. It is a consumer issue; a professional standards issue and a systemic risk issue.

“And the systemic risk is this: if retrospective reclassification becomes normalised, if product providers can selectively reinterpret commitments already made then guaranteed renewability becomes conditional, not guaranteed. Once that line is crossed, every Australian with a long-term insurance policy is exposed. Not just iExtend clients. Every policyholder who believes the promise in their contract means what it says.”