Friday, June 26, 2015

Australia - proposal to half the upfront commission on life insurance policies

AUSTRALIA: The life insurance industry faces a shake-up -including a halving of commission rates- under proposals submitted by three major financial advisory associations to be implemented over a transitional period of three years. The proposals are welcomed by the government.

The reform package, from the Association of Financial Advisers (AFA), Financial Planning Association of Australia (FPA) and Financial Services Council (FSC), cuts the upfront commission rate on life insurance policies from 120% of premiums to 60% by 2018. On-going commissions will be limited to 20% of the annual premium from next January.

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