ClearView warns on FSC insurance terms ‘race to bottom’

ClearView Wealth has specifically warned a key Parliamentary Committee against following an industry approach being led by the Financial Services Council (FSC) around standardised life insurance policy definitions, arguing they will create “a race to the bottom”.

In a submission filed with the Parliamentary Joint Committee on Corporations and Financial Services, ClearView managing director, Simon Swanson has declared that his company is concerned about the approach being headed by the FSC.

The submission acknowledges that policy wordings can be complex and confusing and that the industry should strive to create definitions that “are truly clear, concise and effective” but argues that the FSC approach based around product terms definitions needs careful reassessment.

Related News:

It said the FSC approach:

• Potentially creates a "race to the bottom" (and/or no motivation to rise above the

bottom);

• Presents the real risk of stifling creativity and innovation in life insurance products,

including the types of changes discussed above; and

• Ultimately doesn't help deal with the existing legacy product maintenance issues

present in the industry (and potentially just exacerbates them).

Elsewhere in the ClearView submission, the company has expressed its strong support for the law being changed to allow life insurance companies to “proactively manage claims” to get clients back to work sooner by providing rehabilitation and allied health support benefits.

“Allowing life insurance companies to proactively manage claims by providing rehabilitation and allied health support services will benefit society by increasing the likelihood of people returning to work and good health,” the submission said.




Related Content

ClearView warns on FSC insurance terms ‘race to bottom’

ClearView Wealth has specifically warned a key Parliamentary Committee against following an industry approach being led by the Financial Services Coun...Read more

ClearView warns on FSC insurance terms ‘race to bottom’

ClearView Wealth has specifically warned a key Parliamentary Committee against following an industry approach being led by the Financial Services Coun...Read more

Is the PC’s vertical integration definition too narrow?

The Financial Services Council (FSC) has welcomed the Productivity Commission’s (PC’s) finding that vertical integration is “not a problem in an...Read more

Author

Comments

Comments

Mr Swanson,
The legacy products most life companies have a issue with wouldn't be a problem if the current products now being offered to the consumer weren't inferior in both benefits and policy conditions.
The whole Life insurance deserves what it gets, because, through the lack of real competition, there are only a handful of companies now competing in the market place, all offering the same inferior products.
The industry has already raced to the bottom.... the only thing that differentiate one life company from another is, which one a client needs to see to get assistance at claim time..... ACA, 60 Minutes or a good lawyer.
Add to that the intention of the FSC and self interested parties to remove the advisers from the client process ... and to foster the Direct insurance route.... is what you wished for !!!

I think the FSC have a lot more to concern themselves at present than pushing for standardized insurance definitions.
Things like the expulsion of member companies from the FSC membership due to possible breaches of both the FSC Standard No.1 Code of Ethics and Code of Conduct and possible expulsion from the FSC Board of these member company representatives.
Based on the outcomes from the RC, it is untenable the FSC continue these companies as full members and untenable the Board members remain.
If the FSC decide to not sanction, cancel or suspend these companies' memberships, it is very clear the Govt and Kelly O'Dwyer can no longer rely on the FSC for input into any legislative negotiations whatsoever and the FSC would be smart in not being seen to be ploughing political donations into both major political parties year on year such as $113,545 in 2015/16 and another $89,570.75 in 2016/17.
An organisation that would not sanction offending members but would continue to buy access to political parties through donations surely could not be taken seriously regarding conflict of interest in the legislative design and negotiation process....just like they couldn't be trusted in respect of the LIF negotiations, their involvement in the LIAWG and their blatant and conflicted support of the Trowbridge report.

I suggest that any submissions made by Clearview should be viewed in the context of the matters set out in this ASIC media release:
18-029MR ClearView refunds $1.5 million for poor life insurance sales practices

Add new comment