ClearView wants the Financial Services Council (FSC) removed from its role developing an industry standard for approved product lists (APLs).

The Federal Government has charged the FSC with the task under its Life Insurance Framework reforms.

In a submission to a Parliamentary Joint Committee on Corporations and Financial Services industry inquiry, the insurer says it has “reluctantly reached the view that the pro-consumer and pro-competition outcomes sought by the Government will not be achieved if the FSC is permitted to continue its current course”.

“This assessment results from the dominant position taken within the FSC by large, vertically integrated institutions that have no motivation to agree to a standard that would remove or even reduce current anti-competitive practices.”

ClearView says the theory behind APLs is fine, but in practice it means dealer groups use products from their institutional owners only.

It calls this “conflicted APL”, which “potentially involves life insurers and advisers in serious breaches of duty, and in many cases constitutes unconscionable and anti-competitive conduct. A conflicted APL is structurally adverse to improved life insurance customer outcomes, and protects incumbents from competition.”

ClearView also flags issues with dealer groups charging “shelf fees” to have products put on their APLs. It says dealer groups request fees for adviser training and education, which can range from $50,000-$500,000 a year.

“This is utterly disproportionate with what is legitimately required for adviser training and education. The practice of demanding these fees, in a completely unregulated and uncapped manner… has continued despite the ban on conflicted remuneration.”

ClearView wants “conflicted APLs” banned through legislation. It says a draft FSC standard states the inclusion of only two insurers per list is acceptable.