The Bill to introduce the Trowbridge reforms, the Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016 (Cth) (Bill), has been introduced into the House of Representatives.
The Bill does not include any fundamental changes to the proposed commission caps, their amounts, clawback, grandfathering arrangements or the planned 1 July 2016 implementation of the reforms.
However, a number changes have been made since the exposure draft which refine or clarify the application of the regime.
Key examples include:
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There are also a number important aspects where the Bill has remain unchanged, for example:
- equal treatment of general and personal advice;
- no caps on the level-commission limb of the exemption; and
- responsibility for setting the commission caps and clawback requirements rests with ASIC.
The EM also provides new details of the scope of the 2018 industry review which the Government has requested ASIC to undertake. The areas to be the subject of review include:
- distribution and sale of life insurance;
- the provision of advice;
- adviser commissions;
- policy lapse rates and premiums;
- life insurance lapser rates; and
- other related factors such as the impact of a code of conduct.