The Government has released draft regulations that will support the Government’s life insurance reform package to better align the interests of financial firms with consumers.
The regulations, combined with the legislation, will implement the reform package and are intended to address a number of issues raised during consultation on the legislation, including by:
- providing a 12 month transition period during which stamp duty relating to death benefits may be included in the calculation of commissions, while industry make necessary system changes to exclude it in the future;
- prescribing certain limited circumstances under which 'clawback' arrangements are not intended to apply, such as in the case of self-harm by the insured, or where a premium is reduced due a decision by the insured to quit smoking; and
- providing for the grandfathering of existing employee-employer remuneration arrangements in a manner broadly consistent with that under the Future of Financial Advice reforms.