The corporate regulator has released a consultation paper asking for feedback on a new example statement of advice for life insurance.
ASIC said in a statement that Consultation Paper 284 (CP 284), Example Statement of Advice for life insurance: Update to RG 90, seeks feedback on the new example SOA and related updates to the guidance in Regulatory Guide 90 (RG 90), Example Statement of Advice: Scaled advice for a new client (RG 90).
The review was conducted as part of the Life Insurance Framework announced last November by Minister for Revenue and Financial Services Kelly O’Dwyer.
ASIC noted that the design of the example SOA was informed by behavioural research into how people find and understand the information in SOAs, and illustrates how an adviser can produce a compliant SOA that is concise, structured in a way that is easy to follow and written in simple, plain English.
The development of the new example SOA follows a number of policy developments in the retail life insurance sector that have highlighted the need for better SOAs, the corporate regulator said.
ASIC also said it was asked by Ms O’Dwyer to consider prominent upfront disclosure of commissions in SOAs, and CP284 forms part of this review.
ASIC deputy chairman Peter Kell said the SOA should not be designed as a mechanism to protect advisers against liability or as a compliance tool.
“ASIC has consistently emphasised that the purpose of an SOA is to communicate to the client important and relevant information about the advice they receive,” Mr Kell said.
“We welcome feedback that will help advisers achieve this objective.”
The new example SOA will replace the example SOA set out in RG 90 and will close submissions on 31 July.