Life insurers granted conditional relief to facilitate policy reissue
The Australian Securities & Investments Commission (ASIC) has granted conditional relief for life insurers from the design and distribution obligations (DDO) when reissuing policies in certain and limited circumstances.
DDO applies to financial products issued on or after Oct. 5, 2021.
The relief will reduce life insurers’ regulatory burden to easily reissue pre-DDO policies in the circumstances with low risk for consumer harm. It will also provide for the correction of administrative errors and the reinstatement of lapsed policies.
How to qualify for the relief to facilitate policy reissue
The reissued policy will qualify for relief if:
It has originally been issued before October 5, 2021, except where the policy is reissued to correct an administrative error or reinstate a lapsed policy
It has been reissued at the request of the policyholder, except where the policy is reissued to correct an administrative error
It will be reissued on the same terms and conditions without additional underwriting or individual loadings, apart from changes necessary to affect the transaction
It will be issued to the same policyholder
The instrument will expire on March 16, 2028.
What’s the latest in the Australian life insurance industry?
The Australian life insurance industry faces regulatory changes, with the Australian Prudential Regulation Authority (APRA) planning to remake four life insurance prudential standards without amendments before the sunsetting date.
Meanwhile, the Life Code Compliance Committee (LCCC) recently announced its positive industry outlook, revealing that “breach events” had decreased significantly in 2021-22. Additionally, the number of customers affected by these cyber events was cut in half.