Sally Loane

The life insurance industry has put further steps in place to support Australians through the unprecedented public health and economic impacts of COVID-19.

Last week the Financial Services Council (FSC) announced an initiative on behalf of participating life insurance member companies to ensure that if people lose their job, are stood down or have reduced working hours due to COVID-19, this will not affect their total and permanent disability (TPD) cover.

To align with the current JobKeeper Payment scheme, the initiative runs to 27 September 2020 and claims must be lodged before 1 January 2021.

FSC CEO Sally Loane said this initiative aims to ease any concerns people may have with their TPD cover by preventing any changes to cover being automatically triggered because of COVID-19.

“Millions of working Australians have TPD cover through superannuation which pays out a lump sum if you become totally and permanently disabled because of illness or injury,” Ms Loane said.

“A claim for TPD is assessed on whether the person is expected to be able to work ever again. For this reason, the TPD definition used to assess a claim is based on the person’s recent working arrangements.

“Typically, this depends on the number of hours the person was working and whether they were in casual work before the illness or injury happened. Broadly speaking, the fewer hours you work, the stricter the definition used to assess your TPD claim.

“For most people, changes to TPD definitions happen only after their working arrangements have changed for 6 or 12 months (to cover parental leave, for example). For others, this change can happen after 3 months, depending on the particular policy wording.

“What this means is that some Australians who lost their job, were stood down or had reduced working hours due to COVID, could see their TPD coverage change from 11 June 20201 .

“To address this, today’s announcement ensures that if you make a TPD claim resulting from an illness or injury occurring since the pandemic has started, participating life insurers will assess your claim based on your working arrangements as at 11 March 2020 – the date when COVID-19 was declared a pandemic – meaning you keep the cover you had based on your working arrangements before the COVID pandemic declaration. ^[1]

“This announcement has been timed to ensure the initiative is up and running before anyone is adversely affected,” Ms Loane said.

As at the end of 2018, there were over 7.5 million^[2] Australians with TPD through their group superannuation policy and over 25,000 TPD claims were lodged in 2019.

This initiative follows the FSC Life Insurers commitment to ensure Frontline Healthcare Workers are not prevented from obtaining life insurance cover with participating life insurers purely because of their exposure, or potential exposure, to coronavirus.

Life insurers will confirm their participation by making a statement on their website.

——–

[1] 11 June 2020 is 3 months after WHO declared the coronavirus to be a global pandemic on 11 March 2020.

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Sally Loane

The Financial Services Council, which represents most of Australia’s life insurers, has launched the inaugural Parliamentary Friends of Insurance Group alongside MLC Life Insurance and AIA Australia.

At a launch event in Canberra on Wednesday 18 October, fitness data for three federal politicians – Senator Deborah O’Neill, Senator Dean Smith and Ms Terri Butler MP – was released to demonstrate how wearables and wellness programs can improve the health of Australians.

Each of the politicians wore a fitness tracker for one month to monitor step count, hours of sleep, heart rate and calories burned.

Their results were as follows:

Sally Loane, Chief Executive Officer at the FSC, said, “The life Insurance industry in Australia has been going through massive reform. It’s terrific to hear how insurers are using the latest technology to help people live longer and healthier lives, over and above providing insurance policies. These initiatives, which are beginning to merge positive health and life insurance outcomes, are very welcome.”

Life insurers are increasingly investing in wellness programs to help improve the health of their customers.

MLC On Track and AIA Vitality are examples of health and wellness programs designed to incentivise and reward customers for physical activity and positive health behaviours.

These programs deliver positive benefits for customers, as well as shared benefits for both government and insurers through lower health costs and lower claims.  It’s a win-win-win and gaining traction across the industry.

Damien Mu, Chief Executive Officer of AIA Australia and New Zealand said, “Most Australians are aware that we could, and should, be taking steps to improve our health. But we overestimate our ability to make healthy choices consistently, and underestimate the long-term harm caused by daily unhealthy decisions. By rewarding healthy behaviour, health and wellness programs are a proactive way for life insurers to make healthy choices the easiest choices and help people live longer, healthier, happier lives.”

David Hackett, Chief Executive Officer at MLC Life Insurance, said, “As the life insurance sector adapts to changing customer needs and the era of big data, it’s vital that insurers use technology to provide more value to customers and support them throughout their lives, rather than simply at the time of making a claim.

“It’s great to be recognised for the work we are doing to improve the health of customers – and for our parliamentary representatives to engage in this push, and support us to support our customers,” said Hackett.

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The FSC recognises the important work ASIC carries out to promote consumer confidence in Australia’s financial system, and believes Mr Shipton is well-placed to lead the regulator through the next phase of that journey.

FSC CEO Sally Loane said: “The FSC has a long-term and sound relationship with ASIC, which is one of the strongest regulatory regimes in the world. We look forward to continued and positive engagement focused on both maintaining and strengthening
community trust and confidence in financial services.”

The FSC also takes the opportunity to thank outgoing Chairman Mr Greg Medcraft for his significant contribution to improving consumer outcomes and industry engagement during his time at ASIC, and wishes him well in the future.

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Mathias Cormann

The Financial Services Council (FSC) is leading a delegation of senior Australian funds management executives to South Korea and Japan this week to promote trade opportunities ahead of the commencement of the Asia Region Funds Passport regime at the start of next year.

Senator the Hon Mathias Cormann, Finance Minister and Deputy Leader of the Government in the Senate, will lead the delegation, which has been arranged with the support of Austrade.

The delegation will meet with funds management leaders in Tokyo and Seoul, as well as with senior officials from local financial services bodies, business councils and sovereign wealth funds to promote Australia as an important financial services trading partner in the region ahead of the commencement of the Asia Region Funds Passport on 1 January 2018.

FSC CEO Sally Loane said: “With the fourth largest pool of managed funds globally and deep expertise derived from managing one of the highest regarded pension systems anywhere in the world, Australian fund managers have much to offer our trading partners in Asia.

“With the right policy settings and the full support of our neighbouring economic partners, financial services, which is already the biggest contributor to the Australian economy, can flourish as the growth engine of the nation.”

The delegation includes representatives from the FSC, Austrade, AMP Capital, Challenger, La Trobe Financial Asset Management, NAB Asset Management, Nikko Asset Management, Regal Funds Management, Aberdeen Asset Management and Yarra Capital Management as well as PwC, KPMG, King & Wood Mallesons and Hall & Wilcox.

It will also be joined by representatives of the Australia-Japan Business Cooperation Committee and Japan-Australia Business Cooperation Committee.

The trade mission to Japan and Korea this week follows a meeting of the Passport Joint Committee in Thailand last week where regulators from participating jurisdictions discussed progress on the Passport.

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Sally Loane

Inquiries into the financial services sector have cost the industry more than $3 billion since the global financial crisis, Sally Loane, chief executive officer of the FSC, told industry executives at a lunch in Melbourne organised by public relations firm Pritchitt Partners yesterday.

“Currently there is the Parliamentary Joint Committee Inquiry into Life Insurance, a three-stage Productivity Commission Review of Superannuation, another into Competition in the Australian financial system, and Labor’s Senate Economics Inquiry into Consumer Protections in Financial Services, all on-going. As well, there’s a taskforce conducting a review of ASIC’s enforcement powers – one in particular looking at industry consumer codes in our sector.

“The FSC is against calls for a Royal Commission.

“Royal commissions are a slow process, only look at past practice and inevitably go off at tangents.

“Any continuing reforms and changes in financial services are always needed quickly to keep up with the fast rate of change in the industry, not least because of technology and the rapidly changing needs and expectations of the community,” Ms Loane said.

Chris Bowen recently outlined Labor’s planned Royal Commission, making it clear that all superannuation funds would be included whilst also adding that they would do a stock take of APRA and ASIC.

Ms Loane questioned why this couldn’t be done with a more simple inquiry, instead of an expensive and time-consuming vehicle like a Royal Commission.

“Our sector has undertaken substantial reform and remediation and our view is that a Royal Commission into financial services is not necessary.

“We believe that the financial services industry as a whole has much to be proud of, having introduced standards and codes in recent years that will help deliver value, build trust in the community, and reduce the cost to Australians of managing financial affairs.

“We are uniquely placed to take up the mantle of consumer reform so that the government can get on with its job of governing. Proving as an industry we can regulate ourselves also strengthens consumer trust in the sector. In this light, we are concerned about a proposal that could act as a handbrake on self-regulation,” she said.

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Andrew Bragg

The Financial Services Council’s Director of Policy Andrew Bragg has resigned and will leave the FSC at the end of November.

Mr Bragg has been a member of the FSC’s policy team since 2009 and was appointed Director of Policy in 2014.

Sally Loane, FSC CEO said: “On behalf of the FSC team and our members, I want to thank Andrew very sincerely for his excellent service to the FSC and its members over a long period.

‘He is passionate about good public policy and has helped deliver many positive outcomes for the financial services industry through advocacy and fact-based research, including the FSC’s Standard 20, which has delivered stronger governance to superannuation funds by mandating a majority of independent trustees for FSC member funds.

“He was also instrumental in initiating the Trowbridge review into the life insurance industry and pushing for a competitive landscape for financial services. “We wish him very well in his future career.”

Mr Bragg plans to work in the public policy arena.

A search for Mr Bragg’s replacement will be announced shortly.

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Sally Loane

The Financial Services Council welcomes the Australian Government’s commitment to fix withholding tax rates for Australian investment vehicles during the next 12 months.

FSC CEO Sally Loane said “Australia’s complex and uncompetitive withholding tax system is widely recognised as a significant barrier to exporting Australian financial services and products.

“Today’s commitment by the government to fix the withholding tax boondoggle is welcomed by the industry.

“Creating a competitive and easy to understand withholding tax regime will set Australia up to compete in the Asia Region Funds Passport and will also position the industry to capitalise on the North Asian free trade agreements.

“Australia’s financial services sector has the potential to be the next growth engine of the Australian economy. Policy changes to increase our financial services exports are a fundamental element of ensuring Australia benefits from the growing pool of wealth in the Asian region.”

FSC welcomes the Opposition’s ongoing support for the export of financial services agenda. The Shadow Treasurer Chris Bowen reiterated Labor’s commitment to removing barriers to exports of financial services at the FSC’s Leaders Summit in Melbourne.

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Mr Lloyd will replace Greg Cooper, CEO of Schroder Investment Management Australia, who will step down as Chairman tomorrow.

“I have enjoyed my tenure as Chairman of the FSC. It’s a privileged position and I’m proud of what we have achieved,” Mr Cooper said.

“I leave the FSC Board in good hands as Geoff has made a significant contribution over many years.

Mr Lloyd has held a number of positions within the FSC having also been Co-Deputy Chairman, Deputy Chairman of the FSC’s Administration & Risk Board Committee, Deputy Chairman of the FSC’s Nominations Board Committee and Co-Chairman of the FSC’s Advice Board Committee.

“With more than 25 years’ experience in financial services and a passion for improving Australia’s financial future, Geoff is the ideal person to help steer the FSC through its critical next phase,” Mr Cooper added.

Mr Lloyd thanked Mr Cooper for his significant contribution to the FSC and to Australia’s financial services industry.

“Greg’s leadership has been integral in helping the industry navigate substantial regulatory headwinds and opportunities. He has encouraged a collaborative approach to tackling issues and can be very proud of where the FSC is today,” Mr Lloyd said.

“Importantly, Greg has worked tirelessly to advance the position of the financial services industry and to create a more prosperous future for all Australians.

“I look forward to carrying forward this charge.”

Annabel Spring, Group Executive of CBA Wealth Management, has been appointed Co-Deputy Chair, filling the role left vacant by Mr Lloyd’s appointment. Ms Spring has been a Director at the FSC for four years and also Co-Chairs the FSC’s Superannuation Board Committee.

“Annabel has been a valued contributor to the FSC for a number of years and is well respected across the industry, particularly for her determined efforts to promote policy to close the superannuation gender gap,” FSC CEO Sally Loane said.
“We look forward to her contribution as Co-Deputy Chairman.”

Alexis George, Managing Director of ANZ Wealth Australia Limited has been elected to the Board of the Financial Services Council, replacing Robin Burns, former Managing Director of Equity Trustees Limited who retired in May 2016.

“The FSC is grateful for Robin’s long and productive period on the Board, including his role in merging the FSC and the Trustee Companies Association of Australia,” Ms Loane said.

“We welcome the breadth of experience Alexis will bring to the Board.

“During her 20 year career in financial services, Alexis has held senior roles spanning superannuation, funds management and insurance across Australia, Europe and Asia. She is passionate about helping Australians grow and protect their wealth, believes in the importance of giving consumers access to quality financial advice, and is a strong advocate for improving the customer experience.”

The FSC Board now comprises:

• Chairman: Geoff Lloyd – CEO & MD, Perpetual Limited
• Co-Deputy Chairman: Brad Cooper – CEO, BT Financial Group
• Co-Deputy Chairman: Annabel Spring – Group Executive, Wealth Management, Commonwealth Bank of Australia.

Directors:

• Brian Benari – MD and CEO of Challenger Limited
• Pauline Blight-Johnston − Group Executive of Insurance and Superannuation, AMP
• David Bryant − CEO & CIO of Australian Unity Investments
• Alexis George – MD, ANZ Wealth Australia Limited
• Brett Clark ̶ Group CEO and Managing Director of TAL
• Lochiel Crafter − Head of Asia Pacific, State Street Global Advisors
• Andrew Hagger – Group Executive, NAB Wealth and CEO MLC Limited
• Brett Jollie – MD, Aberdeen Asset Management Australia Limited
• Damien Mu −CEO of AIA Australia Limited
• Greg Cooper – CEO of Schroder Investment Management Australia

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Sam Hallinan from Nikko AM, one of the 2016 winners.

NINE outstanding financial services executives have last tonight been honoured with industry excellence awards at the Financial Services Council Leaders Summit Gala Dinner in Melbourne.

The five men and four women were recognised for their sustained professional support and leadership of the financial services industry.

Financial Services Council CEO Sally Loane applauded the winners, saying the awards were the longest running in the FSC’s history.

“The FSC industry excellence awards are designed to acknowledge individuals in our member companies for their outstanding contributions to our industry’s future,” Ms Loane said.

“They are recognised for their willingness to go above and beyond the call of duty in support of policy development, regulatory balance, research programs and industry initiatives.

“Since 2004, only 48 individuals have met these incredibly high standards. I am delighted a further nine outstanding nominees have been added to the list in 2016.”

The 2016 winners are:

• Sarah Little, Executive Manager Strategy, CBA Wealth Management Advice
• Andrew Casperson, National Manager, Retail Product Development, ANZ
• Kelly Kerr, Senior Strategy and Solution Design Manager, BT Financial Group
• Jon Ireland, Partner, Henry Davis York
• Sam Hallinan, Managing Director, Nikko AM
• John Kirkness, Head of Tax, Insurance & Superannuation, AMP
• Claire Machin, Special Counsel, Herbert Smith Freehills
• Alison Wheatley, Special Counsel, Herbert Smith Freehills
• Michael Vrisakis, Partner, Corporate, Herbert Smith Freehills

Criteria used to select the award recipients included:

• The individual has made an outstanding contribution to an industry (and/or FSC) field of endeavour which supports the industry and its customers;
•  The individual’s contribution has been outstanding when assessed against similar contributions from other individuals working on similar projects: and
• Active participation in FSC Board Committees, Working Groups, Expert Groups and special projects.

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Amanda Young

The Financial Services Council and First Nations Foundation congratulate AUSTRAC for the release of its guidance note to aide the identification of people of Aboriginal and Torres Strait Islander heritage (Guidance) announced at the FSC Leaders’ Summit yesterday.

For over two years, FNF and the FSC have sought improvements to AUSTRAC’s guidelines to allow FSC’s members to better identify and engage with Indigenous Australians.

“Allowing financial institutions to tailor identification of customers of Indigenous heritage will boost financial inclusion.” Andrew Bragg, FSC Director of Policy said.

“The present law prevents financial institutions from taking cultural factors into account when legally identifying and engaging with the first Australians.”

“This issue is particularly pronounced in remote communities where drivers licences and passports can be extremely rare,” Mr Bragg said.

“In a world strangled by red tape, Aboriginal and Torres Strait Islander communities are often left out. Cultural practice may require you to change your name if it coincides with a relative who just died, an arbitrary date of birth may have been chosen for you which is not accurate, or your name is too challenging for Western spelling,” said Amanda Young, CEO of the First Nations Foundation.

“It is a breath of fresh air for AUSTRAC to have found a common sense approach which can satisfy all needs and they are to be commended for this Guidance. We hope the financial sector pick up on this leadership and adopt the same practice so our First Nations people are included financially,” Young said.

For example, a common challenge the Guidance specifically addresses, is the difficulty around identification that occurs when a family member has passed away. As is customary in Indigenous culture, the name of a deceased family member may not be used for a period of time after their death.

Many Indigenous Australians who share a name with a deceased person often subsequently change their name. Without official identification, such as a passport or drivers’ license, verification of the new name becomes challenging for financial institutions and hampers the payment of insurance claims or superannuation to beneficiaries. For such a situation, the Guidance approves processes of verification based on reference letters by an acceptable referee, such as a doctor.

These same verification processes can also be used by individuals for setting up bank accounts, superannuation and insurance services. Indigenous community cards are also listed as an acceptable form of identification. As such, the Guidance paves the way for financial institutions to facilitate greater financial access to Aboriginal and/or Torres Strait Islander communities.

The First Nations Foundation, supported by the FSC as a community partner, is the only nationally operating Indigenous charity solely dedicated to improving financial well-being.

The AUSTRAC guidance can be found at here. The FSC also acknowledges the contribution of the Indigenous Super Working Group towards this achievement, which includes representatives and members from the Australian Institute of Superannuation Trustees, the Association of Superannuation Funds of Australia, First Nations Foundation, as well as the FSC.

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