The key figure behind the report that sparked the newly proposed life insurance framework, John Trowbridge, says he will be keeping tabs on the industry's progress in introducing the reforms.
Following the release of a new framework for the risk advice industry last week, Mr Trowbridge – the independent chair of the LIAWG - said he was "pleased" the essence of the reforms he proposed had been adopted, adding they must now be introduced "quickly and constructively".
With the introduction of the reforms to be carried out over a three-year period, Mr Trowbridge said he would also be a "keen observer" of the industry's progress in implementing the reforms.
“The reform process is to be closely monitored and a review is to be undertaken in 2018," he said.
"This review should examine how effective the transformation is at that stage and consider the balance of my recommendations, in order to identify the further reforms needed to overcome remaining misaligned incentives and better support the interests of consumers.
"[It will] enable residual remuneration conflicts, quality of advice questions and industry effectiveness to be reassessed at that time and further reforms to be undertaken,” Mr Trowbridge said.
Following the release of the proposals, a number of life insurance product providers have come out in support of the changes, including CBA and MLC, AIA, TAL and Zurich.
Commonwealth Bank group executive of wealth management Annabel Spring said the bank has worked with advisers and industry groups to “help deliver these reforms” which, she added, will “transform insurance and advice” to deliver long-term benefits for clients.
“The phased commission changes provide clarity for advisers as they adjust their business models to enable them to continue to meet the financial needs of all Australians, and we are committed to ensuring advisers are supported as the changes are implemented,” Ms Spring said.
NAB Wealth group executive and chief executive of MLC Andrew Hagger said the reforms “represent a positive step for the industry”.
Mr Hagger added that the “complex process” has benefited from the “guidance and leadership” of Assistant Treasurer Josh Frydenberg.
Life insurer AIA Australia chief executive Damien Mu said the proposed framework will have a “significant impact” on the life insurance industry and in particular advisers and, as a result, support from life insurers for advice partners will be “critical”.
“We will need to work more closely together on issues like product design, structure, process and systems and believe that a partnership approach, now more than ever, will be paramount to achieve a successful and sustainable outcome,” Mr Mu said.
“For consumers, we believe their best interests are served by having a robust market that supports choice, access to quality advice, independence, innovation, competition and value. We believe the reforms support these interests,” he said.
TAL chief executive Brett Clark said the reforms were both “balanced and significant”.
“[The reforms] are designed to provide a way forward for life insurers and advisers to work together to deliver a sustainable and high quality life insurance industry for consumers,” Mr Clark said.
Zurich general manager of retail, life and investments Philip Kewin said the reforms "significantly improve" the sustainability of advice businesses.
"Although there are some details to be finalised, we welcome the clarity that this offers after recent uncertainty,” he said.