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ASIC to demand more data on life policies

The Australian Securities and Investments Commission’s (ASIC) implementation of the Life Insurance Framework contains no surprises for advisers, but insurers may be less happy.

A consultation paper released yesterday sets out changes to commissions and the timeframe involved, as previously detailed in draft legislation.

The clawback period of two years remains the same, with the only exclusion being suicide or self-harm.

But for life insurers, reporting requirements on policy details will be more onerous, with ASIC intending to collect more information than previously stated.

It will collect data on policies sold through personal and general advice, plus direct sales.

The data will include how many policies are inforce, including start dates, new clients, premiums, sums insured, trends and reasons for policies not being renewed.

Insurers will also have to provide detailed information on commissions, including clawback amounts.

“Reporting the proposed information to ASIC will enable us to monitor changes in industry practices in response to the life insurance reforms, and to establish whether problems in the sector continue to exist,” the paper says.

“The information will be used as part of our review in 2018 of the effectiveness of the life insurance reforms.”

Comments on the consultation paper close on January 29. ASIC aims to release legislative instruments for the reforms in April.

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