Insurers share advisers' responsibility to clients, Accuro boss says
If insurers do not ask for evidence from advisers that they have delivered the service expected to their clients, those insurance companies must take some of the blame for any poor outcomes, one product provider says.
Wednesday, November 14th 2018, 9:00AM 
6 Comments
Geoff Annals, chief executive at Accuro Health Insurance, said insurance and advisers had been in the spotlight in recent times “quite rightly” for a number of bad practises.
He said it was a major issue for a sector that relied on customer trust. “When people think about insurance they think it’s dodgy, not much better than used car sales.”
He said moves to require a higher standard – and proof of that, through increasing regulation, were a good thing.
“It doesn’t mean to say that advisers are bad. But for insurers and advisers, there are some bad practises. We need to up our game and more reliably deliver what consumers are looking for.”
Annals said there had always been advisers who were good and advisers who were less competent.
“We need the less competent to up their game or get out. But it’s no good us pointing the finger at advisers, we need to look at what we do.”
He said when advisers were delivering insurers’ products, the providers had responsibility, too. They needed to ensure that clients had the right information and could find products that suited.
“Our remuneration should reflect that. That’s one of the things insurers can be criticised for. If we remunerate without requiring evidence that the service we expect has been delivered, we should be in the gun, too. “
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Comments from our readers
I appreciate what Geoff's comments are trying to convey, however, it muddies the water. What needs to be clear is Accuro, like Southern Cross, pay a service commission. This follows the servicing adviser, not the introducing adviser.
The structure of the Accuro agency is different to a typical life insurance agency, where the money paid is paid for service. In this regard Geoff's comments have more weight as the insurer on a service commision approach to ongoing remuneration has some responsibility to ensure service is actually happening.
Stepping back and applying this to the life insurance agencies is incorrect, as I have stated a few times, life insurance agencies don't pay servicing commission, they pay longevity of the contract commission as a function of the initial introduction. Agency agreements have no obligation to provide ongoing service in them. And frankly, they shouldn't, that is a contract between client and adviser, not adviser and insurer.
Irrespective of the agency agreements, under the new law and code all advisers will have to up their game on their approach to servicing. Part of defining nature and scope under the FSLAB legislation in addition to the expectations from a professional adviser perspective,
Perhaps they should leave trained and qualified advisers to worry about the advisers clients, and focus on providing their own outcomes for the clients, such as rapid, thorough and fair underwriting.
Do they know even know that there is a change to compliance as we used to know it?
Every provider will be a VIO and clients only options will be VIOs!
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If it is he needs to do a better job helping clients and advisers understand the strengths and weaknesses of his product - fine (but I don't see how that impacts commission). If he is saying advisers need training - fine! But if he is saying insurance companies must form an opionion on the advice given - garbage!.
I for one am not going to appreciate justifying my advice to an insurance company employee who will inevitably not be in a position to comment on the competence of my advice (may not have level 5 and won't know other providers products like I do), will not meet with the client will not know the client's circumstances, will not know their insurance needs, will not know what other covers they may have, will not know the clients aims and ambitions and and and...