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Advisers still failing clients, says Kell

A review has identified “potentially large numbers of advisers who may be providing life insurance advice to clients that is not in their best interests”, according to Australian Securities and Investments Commission (ASIC) Deputy Chairman Peter Kell.

“Similarly, in our other current and recent surveillances that look more broadly at advice, we are still seeing the high levels of poor life insurance that we have identified over the years,” he told the Parliamentary Joint Committee on Corporations and Financial Services.

Advisers with large numbers of policy lapses are under ASIC review ahead of the reduction in allowable commissions for life insurance sales.

The regulator is considering whether to take action against 10 advisers it has reviewed.

ASIC will start gathering data from life insurers every six months for four years from next April, to assess if the remuneration reforms are effective.

It is also working with the Australian Prudential Regulation Authority to develop a public reporting regime for life insurance claims outcomes.

“We are undertaking a ‘deep dive’ into [total and permanent disability] claims handling because we found this had the highest declined claim rate across the different products,” Mr Kell told the committee.

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