Insurers call for replacement business rules in code

Naomi Ballantyne

Submissions that were made during the code working group’s consultation period have been released ahead of the approval of the new code, which will apply to all advisers.

Naomi Ballantyne’s submission on behalf of Partners Life said there were significant risks in consumers replacing a financial product – such as insurance – with another.

“In these situations, a provider of financial advice should not be permitted to recommend a replacement financial advice product to a retail client unless the provider of financial advice compares the risks and benefits of the existing financial product to those of the new financial advice product, relative to the client’s personal circumstances.”

She said the only exception should be if the client proactively refused advice.