The vast majority of people who work in life insurance believe the industry needs government backing so it can properly regulate.
In a survey conducted by DST Systems, a provider of specialised technology, strategic advisory, and business operations outsourcing to the financial and healthcare industries, 85% of respondents want to engage with the Australian Securities and Investments Commission (ASIC) to strengthen the Life Insurance Code of Practice.
About half (47%) said the industry should start working with the regulator now to improve provisions within the Code, reports Financial Standard citing the survey results.
About 72% said the Code needs greater clarity. Other areas of improvement in the next iteration must focus on sales practices and advertising, and policy design and disclosure.
The poll, which was conducted at the recent Financial Services Council Life Insurance Conference, found that more than a third (36%) said that the bar set by the Code was too low, while the majority felt (59%) it was just right.
When asked about the Insurance in Super Voluntary Code of Practice, the industry voiced strong support. Every respondent said launching the code marked a step in the right direction—but they also acknowledged that it needs more work.
When it comes to the dynamics between life insurance and the financial advice sector, participants said adviser remuneration and standards need reforms to improve outcomes for customers. More than half (56%) believed such reforms would improve the low levels of consumer trust.
When asked about direct insurance, again more than half (57%) believed it would grow at a slower rate in the future, because this segment faces a number of issues. This includes: failing to meet community expectations and reputation risk (54%); unconscionable or misleading conduct in telephone sales (31%); and breaching the boundaries of general advice (15%).