Regulators Assess Life Insurers' Progress on Premium Practices
Regulators Assess Life Insurers' Progress on Premium Practices
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The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have released an update on the progress life insurers have made in addressing issues related to premium increases, product design, and disclosure and marketing materials.
This follows previous notifications amid growing concerns that frequent, large, and unexpected premium increases may not have been applied in accordance with policy terms and may not have met reasonable policyholder expectations.
The latest review identified improvements in re-rating practices, marketing and disclosure materials, as well as product governance. However, actions to address increasing premium volatility through product design are still at an early stage. Given the recency of these actions, it is too early to fully assess their effectiveness in reducing the frequency and size of premium increases. Both regulators will continue to engage with individual life companies where the need for further improvement has been identified.
Australians rely on life insurance to protect themselves against adverse events. Life insurers need to ensure their products meet consumers' needs, offer reasonable premium stability over the lifetime of the policy, and continuously manage the expectations of consumers around premium increases.
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Insurance Policy Excess: The amount you will have to contribute when you make a claim.
