Committee should lift life insurance exemption

Superannuation and insurance law firm Berrill and Watson has welcomed the Parliamentary Joint Committee into Superannuation’s report, with the caveat that it should have better addressed lifting the exemption of life insurance from standard cover.

The firm said that the report, released earlier this week, “makes many recommendations which the consumer movement have sought for many years”.

In particular, it welcomed the Committee’s approach to solving long-standing problems of conflicted remuneration and vertical integration.

To this end, the report called for the life insurance industry to:

1. Balance the amount of affiliated and non-affiliated products on their Approved Products Lists (APLs);
2. Clearly disclose affiliations where affiliated products are recommended; and
3. Where an affiliated product is recommended, ensure a comparison of non-affiliated products is also provided.

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Berrill and Watson said that they would have liked to see the exemption of life insurance from standard cover lifted, but said this could still be achieved through the Committee’s recommendations in a roundabout way.

“The recommendations for standard definitions across the life insurance industry assists in achieving the same goal of ensuring that products sold to consumers are not junk insurance and provide reasonable insurance cover,” the firm said.