Consumer advocate Choice has called for the Life Insurance Framework Bill to pass without alteration, arguing it is “an improvement on the status quo” in life insurance advice.

But it retains its hard-line stance on commissions and wants a total ban.

In a submission to the Senate Economics Legislation Committee, Choice argues commissions disadvantage consumers and “should be banned in life insurance advice just as they are for other kinds of [financial] advice”.

“Current remuneration arrangements encourage advisers to sell products rather than provide quality personal advice,” Choice says.

“The bill will improve the situation for consumers but… as long as commissions and other sales incentives for financial advisers remain, consumers will not be able to trust the financial advice industry to help them find the right life insurance product for their needs.”

Although it recommends the bill be passed by Parliament, Choice insists “further steps [be] taken to remove conflicted remuneration in the long term”.

“The Australian Securities and Investments Commission should commence work on a plan to phase out all commissions in life insurance advice for the benefit of consumers,” it says.

“Choice views this bill as the minimum change required to increase consumer confidence in the life insurance advice industry.

“Further reform is necessary and should be implemented in a staged manner over the coming years.”