MLC Life has urged regulators to make compliance more efficient, warning that the time and costs associated with it are becoming too burdensome for practitioners.
In a submission to the parliamentary inquiry into life insurance, the Japanese-owned life insurer said that focus must be given to reducing the cost of compliance, improving life insurance SOAs and taking different insurance specialisations into account when applying technical standards.
“We know many financial advisers are undergoing a challenging period of transition as they adjust to the new Life Insurance Framework and professional standards being developed by the Financial Adviser Standards and Ethics Authority,” MLC Life chief customer officer Melissa Heyhoe said.
“While we support both of these developments, we’re also concerned the existing regulatory requirements lead to risks of increased costs to consumers or force some advisers to exit the industry.”
According to the company’s submission, reducing the cost of compliance would benefit end clients by improving access to advice and improving the overall client experience, and that reducing the need to “interrogate” a client’s full circumstances as part of the SOA process would allow advisers to focus on their needs instead.
Ms Heyhoe cautioned that reforms are needed to ensure that life insurance remains a viable business prospect for advisers.
“Advisers are telling us that unless something changes, life insurance may eventually become unviable to advise on due to time and cost burdens,” the CCO said.
“That’s why it’s crucial we take action now to ensure an affordable and accessible financial advice system and boost the sustainability of the industry.”