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Changes to insurance laws

Understand how current and upcoming changes to regulations could affect your insurance.

The Federal Government has made a large number of changes to life insurance regulations, and this may affect the life cover you have with AMP Life. We’ve put together a summary of these changes to help you understand what the changes are and what they could mean for your insurance.

Emerging changes

 The changeThe details – and what they may mean for you

Member outcomes assessment

1 January 2020

A new law has been introduced making it compulsory for super trustees to assess their members’ outcomes get each year. They must make sure they meet their members’ financial interests by:

  • reviewing their super against comparable products in other funds
  • assessing the fund as a whole against specific benchmarks
  • making sure each MySuper product has an investment strategy

Protecting Your Super (PYS)

Ongoing since 1 July 2019

The PYS law was introduced to help members save for their retirement, by reducing unnecessary fees and charges. If your super account has a balance below $6,000 and has received no contributions or rollovers for at least 16 months:

  • your account will be closed, with the balance sent the Australian Taxation Office (ATO), who will either move your funds into one of your active super accounts or wait for you to claim it
  • your insurance will be cancelled

Putting Members' Interests First (PMIF)

1 April 2020

This law was introduced to reduce insurance fees paid through super for younger members

  • If your super account doesn’t receive any contributions or rollovers for at least 16 months, your insurance will be cancelled – unless you instruct your fund to keep it
  • If you’re under 25 and you open a new super account, you’ll need to ask your super fund to provide insurance cover
  • If you’re under 25 and have a dangerous job (e.g. mining), you’ll automatically receive life insurance through your super – unless you instruct your fund to cancel it

 Life Insurance Code of Practice

1 July 2022

 There will be a new version of the Financial Services Council (FSC) Life Insurance Code of Practice. The new version is designed to improve product design, sales, underwriting, customer service and claims handling for all insurance members

 

Royal Commission recommendations

Based on the findings of the Royal Commission, some new laws are being introduced to help make insurance fairer and more transparent for everyone.

The changeThe details – and what they could mean for you

Duty to take reasonable care not to make a misrepresentation to an insurer

30 June 2020

Currently, in the Insurance Contracts Act, when taking out cover the consumer is responsible for fully disclosing all the information that an insurer needs to know to assess their level of risk.

In future, it will be the insurer’s responsibility to ask the right questions. In a consumer insurance contract, the ‘Duty of disclosure’ section will be replaced with a ‘Duty to take reasonable care not to make a misrepresentation to an insurer’

Application of unfair contract terms provisions to insurance contracts

1 July 2020

 Unfair contract terms (UCT) in the ASIC Act apply to most industries that use contracts with consumers, but not to insurance products. But from 1 July 2020, they will also apply to insurance contracts, giving consumers more protection when they enter into a contract with an insurer

 

Responses from the regulator

Life insurance in Australia is regulated by The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC). The latest responses from our regulators may lead to changes in some life insurance products. Here’s what you should know:

The responseThe details – and what they could mean for you
ASIC Total and Permanent Disability (TPD) Report

ASIC has found that there are issues with the way total and permanent disability (TPD) insurance is designed and the way claims are handled. They have identified a number of actions that insurers must take to ensure TPD products provide better value to their members

APRA Disability Income Insurance (DII)

31 March 2020

 Over the last five years, insurers have been incurring heavy losses on disability income insurance (DII) – leading to sharp rises in the costs of premiums. This situation is unsustainable for both for policyholders and insurers alike. The APRA DII changes will help to make the DII industry sustainable and enable Australians to continue to protect themselves and their families from illness and injury

 

AMP Life is currently working on actions to address the changes to these insurance laws. Our aim is to improve the claims process for all our customers and help the affordability of insurance.

Find out more:

If you have any questions about your insurance:

Important information

AMP Life Limited ABN 84 079 300 379, AFSL No. 233671 (AMP Life), has proudly served customers in Australia since 1849. AMP Limited ABN 49 079 354 519 (AMP Limited) has sold AMP Life to the Resolution Life group whilst retaining a minority economic interest. AMP Limited has no day-to-day involvement in the management of AMP Life whose products and services are not affiliated with or guaranteed by AMP Limited. AMP Limited is not liable for products issued by AMP Life or any statements or representations made in the PDS for those products. “AMP”, “AMP Life” and any other AMP trademarks are used by AMP Life under licence from AMP Limited.

Any advice and information on this website is general in nature and is provided by AMP Life, which is part of the Resolution Life group. The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on the advice, you should consider the appropriateness of the advice, having regard to those matters as well as the relevant product disclosure statement (PDS), available from AMP Life at amplife.com.au or by calling 133 731, before making a decision about the product. Consider speaking to a financial adviser if you have any concerns.

If you decide to purchase or vary a financial product, AMP Life and/or other companies within the Resolution Life group will receive fees and other benefits, which will be a dollar amount or a percentage of either the premium they pay or the value of their investments. You can ask us for more details. 

AMP Life is part of the Resolution Life group and can be contacted on 133 731 or via the contact us page.