21st Feb 2019
The case of Re Kelvin and its implications for minors with gender dysphoria.
7th Feb 2019
Anna Kerr discusses the outcomes of Australia's 2018 report to CEDAW.
The Australian Lawyers Alliance (ALA) advocates for reforms to ensure that consumers are treated fairly by insurers and financial services providers. Recent years have seen an erosion of public trust in the financial services industry which needs to be rectified. The ALA has sought to engage with industry to advocate for meaningful reform that protects the rights of our members’ clients, including the sick and injured. We believe that includes access to legal advice and costs, where appropriate. Below are some key issues on which the ALA has been active:
Fairness and sustainability of super based insurance.
Properly regulated and sustainable default insurance cover in superannuation is indispensable.
We see the value in it every day as our disabled clients receive insurance benefits that allow them to make ends meet and avoid falling into a debt trap as they struggle to cope in medical retirement.
Australian households are among the most indebted in the world, and the underinsurance gap means that working Australian’s and their families depend more than ever on default cover. That gap would be much larger if cover was not provided through super.
That’s why it’s critical that we all work together to get the structure right.
Claims assessment practices
The ALA acknowledges that the majority of disability claims are paid by insurers who act reasonably in their assessment. However there have been plenty of examples where insurers get it wrong and put profits before people.
Some providers of Total and Permanent Disability (TPD) policies have a claim decline rate of over twice the industry average. Consumers deserve to know if their insurer is half as likely as their competitors to accept a claim if they are seriously injured. Others have unacceptably high withdrawn claim rates. Claims might be withdrawn because the claim process is taking too long, is too complex, and results in thousands of claimants giving up. Claimants might also be being intimidated or otherwise treated unfairly by insurers.
The ALA fights for your rights to access this information and improve industry practice.
Dispute resolution schemes do their best with the resources available but, but all too often they have been too slow and un-user-friendly for consumers. The ALA is cautiously optimistic that the consolidation of the various schemes into the Australian Financial Complaints Authority (AFCA) in 2018 will simplify and improve consumer experiences. However, this scheme still has a lot of problems, which the ALA is fighting to resolve by way of public submissions and private advocacy.
Vertically integrated sales models
The newly introduced cap on financial advisors commissions for selling life insurance policies does not address cross selling. Cross selling is systemic within banks, which herd their customers into their own insurance and managed investment products. These products tend to have higher fees than industry super products, leaving their customers worse off.
There is presently nothing to stop a financial advisor from having only ‘in house’ products on its (APL). We also have concerns about the lack of transparency to consumers who tend to assume the advisor is genuinely sourcing the market for the best product.
We call for a requirement that advisors’ Approved Products Lists include benchmark non-affiliated products, and that any advice to buy in house product must be given with a clear comparison with one or more non-affiliated products to demonstrate why the in house product is more appropriate.