APRA and ASIC concerned about life insurance premium increases
The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have expressed their concerns about premium increases in retail life insurance policies.
Following complaints from consumers, APRA and ASIC released the joint letter to CEOs of life insurers and friendly societies (life companies) in which they addressed the problem of inappropriately applied premium increases to life insurance policies, particularly level premium policies, and the fact that some life companies had not acted “in accordance with reasonable expectations”.
Both bodies requested all life companies to review their past premium increases, including for legacy products, to ascertain whether increases or re-pricing decisions had been applied in accordance with the applicable policy terms and urged disclosure and marketing material to determine whether policyholders had been provided sufficient clarity about future premiums.
“We acknowledge that ensuring the ongoing sustainability of life insurance products is a challenging issue. APRA’s measures related to individual disability income insurance (IDII) have set clear expectations on the design of sustainable products, including the need to provide policyholders with reasonable premium stability,” the joint letter read.
Following this, the retail life insurance companies will have until 31 March, 2023 to outline:
- any findings in relation to their review of past premium increases and their appropriate appliance and in relation to misleading for policyholders disclosure and marketing materials
- if any issues of concern were identified what steps the life companies were planning to report, rectify and remedy these issues
- their proposed actions to meet expectations about the design of future product offerings
“We acknowledge that some insurers may not be able to complete the review by 31 March 2023. In this case, we expect an update by 28 February 2023 on the steps being taken to complete the review and the likely timing. ASIC will arrange meetings to discuss individual responses in April-May 2023,” ASIC and APRA said in a joint statement.
ASIC, APRA, FSC, FPA, Life Insurance CO’s, O’Dwyer & Frydenberg all promoted the LIF based on lies of selective Churning data.
LIF has been a complete and utter disaster = far less people insured at far higher premium rates.
All the above should be held accountable for their lies.
I have done quotes recently driectly with TAL, quotes with Australian Super who TAL is also the same insurance company that provides their insurance and the premiums are cheaper with an adviser with commissions.
I have recently done quotes with CFS super, ART super and AIA directly all underwritten by AIA and all three quotes have different premiums.
I reviewed a client yesterday and the premium has gone up 85% over three years.
At some point APRA need to do something about the insurance companies setting fair premiums across their books of businesses. I would love to see the premium increases of retail vs group to see if the companies are fairly increasing premiums on policy holders correctly when considering % of the books I bet they aren’t.