What does Government response to FSI mean for brokers?

by Dallas Booth     21-Oct-2015

Government response to FSI


The Federal Government announced its detailed response to the Financial System Inquiry report on 20 October 2015.

The Government’s response, like the FSI Report, is extensive and quite detailed. Overall, the Government has decided to accept almost all the recommendations from David Murray and the FSI panel.

The Government has also committed to consult extensively on many of the proposed reforms, which will be quite technical when it comes to implementation.


"There is no doubt that anyone giving advice on life insurance, savings and investment products will need to take steps to meet the new requirements for minimum levels of professional education and conduct."

Some of the key decisions announced by the Government include:

  • The Government will implement recommendations which will require product manufacturers (insurers) and distributors (brokers and others) to take responsibility for the design of those products, and the impact the products will have on the target consumers. The Government has committed to undertake detailed consultation on the development of these new legal principles.

  • The Government has accept the recommendation to give ASIC greater powers to intervene in financial services markets. Steps will also be taken to impose greater levels of accountability and transparency on ASIC and other key financial sector regulators.

  • The Government wants “financial advisers” to hold a degree, pass an exam, undertake continuous professional development, subscribe to a code of ethics, and undertake a professional year before they can advise clients. NIBA is taking steps to clarify whether these requirements will apply to general insurance brokers.

  • The Government has decided to implement the life insurance reforms announced by the former Assistant Treasurer in June 2015. This will include changes to life insurance commissions, and a number of other requirements. These changes will take effect from 1 July 2016.

As always, the devil will be in the detail, especially in relation to the proposed new obligations on product manufacturers and distributors.

There is no doubt, though, that anyone giving advice on life insurance, savings and investment products will need to take steps to meet the new requirements for minimum levels of professional education, CPD and professional conduct. The Government has undertaken to consult fully in relation to the implementation of these reforms. Sufficient time will need to be allowed to ensure advisers will be able to meet the new standards.

NIBA will continue to examine the Government’s response in detail, and will continue to advice Members as further developments occur.


There are no comments

You need to login to post comments

Other blogs by Dallas Booth

A relief, but a challenge
The Federal Government has released its responses to the Royal Commission’s recommendations. They have undertaken to take action on all recommendations, but in some cases there are careful and subtle changes in the Government’s response. Read More...
2019 - A Particularly Challenging Year
This note was prepared prior to the release of the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. Read More...
The Royal Commission
As this column is being written, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is holding its final set of hearings. These hearings will consider the causes of misconduct and conduct falling below community standards and expectations. Read More...
The Role, Priorities and Value of NIBA
Each year, the NIBA Board of Directors reviews these goals, strategies and priorities, and there has been ongoing endorsement of the mission, vision, goals and objectives. On 3 October 2018, the Board held a major strategy discussion, where all of these matters were considered in depth. Read More...
We Are Your Voice!
While we always give a good summary of the key issues and challenges we are working on in our Representation section of Insurance Adviser magazine, there are a couple of major projects on the go at the present time that readers might be interested to know about. Read More...
Promoting Professionalism and High Standards of Competence in Insurance Broking
With so much attention to poor conduct being identified by the Royal Commission on Misconduct in Banking and Financial Services, a very timely report on the broking industry’s attitudes to competence and professionalism needs close attention. Read More...
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has identified a large number of serious breaches of statutory and regulatory requirements, as well as numerous examples of conduct that falls short of community expectations. Read More...
The Insurance Brokers Code of Practice
All members of NIBA are required to be part of, and to abide by, the Insurance Brokers Code of Practice. The current Code of Practice has been in operation since July 2014, and is a strong statement of the insurance broking profession’s commitment to its clients. Read More...
The Royal Commission
After four weeks of hearings, very substantial change is starting to happen across the financial services industry. Read More...
The Story So Far
At the time of writing, we have had the first major round of hearings at the Royal Commission into Misconduct in Banking and Financial Services. The stories that have been revealed have been shocking, both in relation to the impact on consumers but more importantly in relation to the extent to which questionable practices appeared to have been sanctioned at very senior levels in our major financial institutions. Read More...
Bringing the Insurance Broking Industry Together
NIBA is the One Voice for insurance brokers in Australia, a role we take very seriously. It is a role that requires very close engagement with the leaders of our industry on a regular basis, to ensure that our messages and our arguments represent the views of all players. Read More...
Product Design and Distribution Legislation - A Whole New Layer of Regulation
NIBA has responded to draft legislation setting out a whole new layer of regulation in financial services. Read More...
Royal Commission, Misconduct and Community Standards and Expectations
Just prior to Christmas 2017, the Governor General issued Letters Patent to the Hon. Kenneth Hayne, AO QC, to undertake the Royal Commission into misconduct in the financial services industry. Read More...
Australia's voice on the world insurance stage
Our CEO Dallas Booth explains why NIBA being a part of the Word Federation of Insurance Intermediaries really matters for Australian brokers. Read More...
Mitigating circumstances
The Northern Australia Insurance Premiums Taskforce report reinforces what the insurance industry has been saying for years: disaster mitigation is the key to reducing premiums. NIBA CEO Dallas Booth explains what it really means. Read More...
A big win for brokers – and another for their clients!
NIBA CEO Dallas Booth reports on two great insurance outcomes - one for brokers, and one for householders in NSW - that came to light at the end of 2015. Read More...
The importance of industry representation
NIBA CEO Dallas Booth outlines the regulatory challenges on the horizon for 2016, as well as highlighting a major representation win for brokers from late 2015. Read More...
NIBA - ANZIIF partnership: what does it mean for NIBA members?
Following the announcement of NIBA and ANZIIF's new partnership on broker education, our CEO Dallas Booth outlines what this means for the role and value of NIBA. Read More...
Government and regulatory update: November 2015
NIBA CEO Dallas Booth provides an update on the latest government liaison and regulatory issues impacting on broking. Read More...
Representation; Professionalism; Community: what does it mean for insurance brokers?
NIBA CEO Dallas Booth on why this year's Convention themes of Representation, Professionalism and Community ought to resonate with every broker. Read More...
Best of the best: NIBA magazine crowned world's finest
NIBA CEO Dallas Booth on why news of Insurance & Risk Professional magazine's international award is good news for NIBA - and readers. Read More...
Will there still be room for brokers in the future workforce?
Brokers are far from immune to the many changes that technology is ushering into our world. As ways of doing business evolve and change, the broker who wants to avoid being replaced by a machine must do the same, says NIBA CEO Dallas Booth. Read More...
Educating insurance brokers for the future
Scandals have put the training standards for financial advisers firmly in the spotlight, but brokers need to make sure their training is relevant to the skills they require now - and tomorrow, writes NIBA CEO Dallas Booth. Read More...
The role of an insurance broker in society
In a guest blog post, Global Transport Insurance's Nas Taseer outlines why the role of the insurance broker has never been so valuable - and why every business owner needs one. Read More...
NIBA Convention - uniting the community of intermediated insurance
Registration for the 2015 NIBA Convention opened on 4 May ahead of the event itself in Melbourne from 6-8 September. NIBA CEO Dallas Booth outlines the key reasons to attend, and why the event holds a unique place in the calendar. Read More...
Professionalism in broking - and how to show it
NIBA CEO Dallas Booth explains how professionalism is inherent in broking - and how that can easily be proved to potential clients unsure of the broker value proposition through QPIB and the Insurance Brokers Code of Practice. Read More...
Brokers the key to strata insurance uncertainties
NIBA CEO Dallas Booth on why brokers are ideally placed to prove their worth in the troublesome strata insurance market. Read More...
The true value of good insurance cover
Why having an insurance broker's assistance can be crucial in bouncing back from natural disasters. Read More...

NIBA LinkedIn company page

IRP website

NIBA credentials document