Risk Product, Company and Regulatory Updates as at 2 October 2018

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Product Updates

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Asteron Life Complete product changes
From 1 October, there are some changes to the Asteron Life Complete product.

  • Stand Alone (SA) Total and Permanent Disability (TPD) Cover is now available under Suncorp Master Trust Ownership for new and existing Asteron Life Complete customers, and can use the Pay By Any Superfund (PBAS) facility.

  • If TPD cover greater than Life is required, an additional SA Policy will be issued and the policy fee will be waived. This process is automatic.

  • Updates have been made for the Severe Rheumatoid Arthritis definition

  • Some fractures have seen reduced payments under Specified Injury Benefits, applying only to new customers

  • The product disclosure statement has been amended, applying only to new customers

Zurich launches new adviser portal
A new online quoting and application platform graces Zurich’s new adviser portal, providing practices with quotes, applications, client management and service requests to improve efficiency and productivity. A scenario planning tool allows comparisons to find the best quotes faster.

MetLife Australia back in retail life business
New modular life insurance policies are the re-entry strategy of choice of MetLife Australia, with advisers being provided access over the coming months.

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Regulatory Updates

ASIC taking civil action against ANZ
Civil penalty proceedings have been commenced by ASIC against ANZ relating to the bank’s alleged involvement in a criminal cartel involving $2.5 billion in an institutional share placement in August 2015. ANZ is alleged to have failed to notify the ASX that $791 of the $2.5 billion was to be acquired by its own underwriters, and not placed with investors. ANZ is defending the allegations. There are allegations of involvement by Deutsche Bank and Citigroup too.

ASIC report finds unacceptable delays in reporting by institutions
A report (REP 594) by ASIC details how ‘serious, unacceptable delays’ have occurred in identifying, reporting and correcting breaches of the law by financial institutions. Key findings include:

  • Financial institutions are taking too long to identify significant breaches - an average of 4.5 years

  • Remediating customer losses are incurring delays - an average of 226 days from the end of an investigation into a breach to the first payment - with an average of 1,517 days before the breach is discovered and an investigation is commenced and completed

  • These breaches cost consumers $500 million, with millions still outstanding

  • Starting an investigation to lodging a report to ASIC of the breach takes an average of 150 days, with the law requiring breaches to be reported within 10 days - 110 of 715 were reported later than this

Dover Financial Advisers and sole director taken to court
ASIC has commenced legal action against Dover Financial Advisers and its sole director, Terry McMaster, with allegations of misleading and deceiving clients. The allegations relate to false and misleading representations to clients about their rights and protections, imbalances in advisers’ rights compared to client rights, and protecting the interests of Dover in the face of poor financial advice.

FASEA announces changes to qualification requirements for advisers
Some key industry qualifications will be taken into account by FASEA and added as credits towards the minimum education standards for current financial advisers. Existing advisers with no degrees will not be required to complete a bachelor degree, but must take eight subjects that are equivalent to a graduate diploma.

Advisers with an existing advanced diploma in financial planning will receive two credits out of the eight subjects/credits. Two more subjects will be credited to existing advisers for work completed to attain the Financial Planning Association’s CFP qualification or the FChFP qualification from the Association of Financial Advisers, so long as they fit the date profile.

NAB and MLC facing class action over consumer credit insurance
Slater and Gordon lawyers have filed proceedings against MLC and NAB for allegedly selling credit card insurance to credit card holders who were ineligible to make a claim. The ineligibles included students, the unemployed, and anyone on a disability pension. Slater and Gordon is alleging that the practice was unconscionable conduct, and therefore a contravention of law. Customers who already had credit card cover in place via other policies were also sold the insurance.