Assistant Treasurer Josh Frydenberg has put the life insurance industry on notice – either the industry manages to self-regulate or the government will step in.
In an opinion piece written for the Australian Financial Review, Mr Frydenberg said the Trowbridge Report is the life insurance industry’s “last chance” to address the problems raised by the corporate regulator on its “own terms”.
Mr Frydenberg also said that while recommendations presented by LIAWG independent chairman John Trowbridge are “controversial”, they are worth considering.
“Wide-ranging and well informed, Trowbridge's report does not shy away from confronting the difficult issues facing the life insurance industry,” Mr Frydenberg said.
“It is up to the industry now to restore public confidence before time for industry leadership runs out,” he said.
Mr Frydenberg highlighted that government has already been presented with a number of options to implement reform, but is waiting to see what action the industry takes before intervening.
“Appropriate reform, hopefully led by the industry, is needed to restore confidence following poor levels of compliance highlighted by ASIC,” Mr Frydenberg said.
“While Mr Murray's Financial System Inquiry and the Trowbridge report provide the government with a number of options for reform, the extent to which government intervention is required will depend ultimately on the industry's own actions.
“Reform can deliver a win-win for advisers as well as consumers by strengthening the sustainability of the life insurance industry,” he said.