Life insurers also took “important steps” during the pandemic that were “worth revisiting”, Mr Cupitt said, pointing to commitments that COVID-19 vaccines would not affect policy terms and conditions.
But she admitted the story of life insurance’s social role had not been well-articulated in the past – a common complaint among the industry executives who led the establishment of a standalone lobby group.
She said the sector had been focused on complying with a raft of new rules and regulations, after the royal commission made 15 recommendations relating to insurance, including a ban on so-called “hawking” of insurance products and reclassification of “claims handling” as a financial service.
It had also been distracted by significant consolidation, including TAL’s acquisition of Westpac’s BT Life business and Zurich’s purchase of ANZ’s OnePath life insurance business as the major banks quit the sector.
“We’ve now got to a point where those regulatory reforms are embedded, the code [of conduct] is being implemented, a lot of M&A activity has settled down,” she said. “We have the opportunity now to work with a new government to explain the role and value of life insurance.”
To achieve that, the CALI board – co-chaired by TAL chief Brett Clark and AIA Australia chief Damien Mu – has been on a spending spree, recruiting Ms Cupitt last year and Keely O’Brien, a former adviser to former prime minister Julia Gillard, as general manager of corporate affairs.
The Australian Financial Review has confirmed former Westpac head of government affairs Michael Johnston and Financial Planning Association policy chief Ben Marshan are also joining CALI in key roles.
Ms Cupitt said her priority was to make sure Australians had sufficient insurance cover in place, after research suggested this was not the case.
She said she wanted to persuade policymakers and stakeholders that life insurance had a critical role to play within the broader “social safety net”, alongside private health insurance and taxpayer-funded social security and welfare. “The values [of the industry] align with the values of our community – we don’t want people left behind, we want people financially protected.”
Asked whether the comment was code for the introduction of health insurance-style tax or other take-up incentives, Ms Cupitt said it was a “little bit early in the conversation” to propose such solutions and that CALI was still formulating its policy platform.
She acknowledged that the sector faced challenges, especially the declining number of financial advisers, who have traditionally been a sales force for life insurance policies. Retail life insurance sales have reportedly halved since the royal commission.
Ms Cupitt backed the controversial Quality of Advice Review, which has proposed making it “easier” for insurers to advise customers directly by removing regulatory requirements including the duty to act in the best interests of clients. Instead, they would be subject to a new duty to “give good advice”, which consumer groups have criticised as “vague”.
The review, chaired by Allens lawyer Michelle Levy, also recommended insurers continue to be allowed to pay commissions to advisers for selling products at the capped rates introduced in 2017 (albeit with an additional layer of client consent).
“We want to make sure that people are able to get the advice they need, when they need it, in the most simple way,” Ms Cupitt said. “And, obviously, these recommendations go a long way to enabling that.”
The former ABA staffer, who worked at AMP and KPMG before her eight-year stint with the banking sector lobbyist, said she was attracted to the role because she believed in the benefits of insurance. “Anybody can get a major illness, anybody can become disabled, anybody can lose a loved one and require additional financial support,” she said. “So, there’s a real universality of need and value for life insurance that I really connected with.”
- Term Life Insurance Buyer's Guide for 2022 – InsuranceNewsNet
- Life Insurance, Annuities and R&D Tax Credits
- With existence getting more expensive, is it worth selling your life insurance policy?
- 3 Reasons Term Life Insurance Is a Better Option for Most People
- ON THE MONEY: More about permanent life insurance | Features