Risk Product, Company and Regulatory Updates as at 23 October 2018
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Product Updates
TAL adviser centre launch, minor changes to product structure and pricing
TAL is launching a new adviser centre, and is implementing some changes in product structure and pricing, as below:
Business Expenses benefit will no longer exist as a standalone product, but instead will become an option under Income Protection. This is how Retirement Protection also works.
Income Protection Optimal is no longer available.
Disability Plus under Income Protection is no longer available.
Mental Health under Income Protection is no longer available.
Child Critical Illness is now a standalone benefit.
In other news at TAL, around 50 jobs have been subject to redundancies as the direct life insurance business is scaled down. The insurer is moving away from outbound sales channels, and as a result the Insuranceline business for life and income insurance, plus controversial pet and funeral insurances, is scaling back.
Raiz Invest and Swiss Re partner up to launch group insurance products
Raiz, a micro-investing platform, and Swiss Re have partnered up to develop a life insurance product that helps alleviate the cookie-cutter approach to superannuation group insurance.
Machine learning algorithms are being used with a predictive underwriting model that is set to offer simple underwriting experiences for customers using predictive modelling. The end result is a highly tailored product after answering just a few questions.
Electronic advice register launch
Adviser Ratings now has a robo-adviser ratings and comparison site offering profiles on 36 financial management fintech solutions that are sold to consumers. The Robo Adviser (Smart Tools) register has electronic or automated advice from budgeting, trading, investing, and retirement services.
BT updates quote and application software, announces policy fee waiver
BT’s LifeCENTRAL+ software has been updated, now allowing sharing of information online between advisers and their support teams. Online applications will soon be available, with restructured questioning. Fees are now being waived on certain policies for a limited time to introduce these new changes to advisers and their clients.
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Regulatory Updates
ASIC’s inspectors in big banks
ASIC’s onsite supervisory staff are to be embedded into the big banks very soon, says James Shipton, ASIC’s chairman. Very senior members of staff are to be the inspectors, moving around from bank to bank, observing how business is being conducted. This action comes after ASIC unveiled their extended approach to regulating the finance industry, with a funding boost from the federal government.
CBA fees for no service EU update
The Commonwealth Bank’s (CBA’s) financial planning arm, Commonwealth Financial Planning Limited, entered into an enforceable undertaking (EU) with ASIC in April 2018 stemming from its fees for no service issues. Ernst and Young were employed to oversee the company’s remediation, with the following observations:
There is no evidence to suggest that CFPL was not taking reasonable steps to ensure proper customer remediation
During June 2016 - June 2017, there was less frequent customer testing and more work by CFPL was needed.
E&Y found that the systems, processes and controls are reasonable and adequate to ensure CFPL can remediate its customers, however the company has a lot of manual processes that could be improved.
An extension was requested for CFPL to deliver its final report
Corporations Act sections of FASEA exams to be open book
The Financial Adviser’s Exam set out by FASEA is to be open book when it comes to the Corporations Act, with it being ‘unreasonable’ for advisers to be able to remember different parts of the Act.
Banks removing trail commissions and grandfathered payments
Australian banks are seeking to remove provisions that allow for grandfathered payments and trail commissions relating to financial advice, but that these removals would not apply to life insurance commissions.
