Financial Services Minister Bill Shorten’s office has confirmed that commissions, volume rebates and soft-dollar payments will still be allowed on general insurance products sold into superannuation funds.

The move has infuriated financial services associations fighting the ban on life insurance commissions being paid on products sold through superannuation funds.

“The position is that the ban on conflicted remuneration applies in relation to life insurance products (life and TPD) sold within superannuation,” the minister’s office told insuranceNEWS.com.au.

“It does not apply to life insurance sold outside of superannuation, and does not apply to general insurance.

“The only key Future of Financial Advice (FOFA) element to apply to general insurance is the ‘best interests’ duty where personal advice is being provided.”

Two weeks ago insuranceNEWS.com.au raised the issue of general insurance commissions being paid in superannuation and was told by a Treasury spokesman they would be banned.

The National Insurance Brokers Association then contacted Treasury and was told general insurance commissions were not affected by the ban.

Mr Shorten’s office says it all came down to “a matter of interpretation”.

“The short answer is that there is in fact no confusion – the questions were interpreted in different ways,” a spokesman said.

Association of Financial Advisers CEO Richard Klipin says allowing one form of commissions while banning another is an example of the contradicting outcomes of the FOFA reforms.

“What is becoming very evident is the FOFA detail is leading to contradictory policy outcomes,” he told insuranceNEWS.com.au. “FOFA means confusion in the marketplace.”

FPA Chairman Matthew Rowe has also criticised the Federal Government’s approach to commissions paid through superannuation.

“The FPA opposes the ban on life commissions in superannuation and this latest move will potentially create an uneven playing field,” he told insuranceNEWS.com.au.

Self-Managed Super Fund Professionals’ Association of Australia CEO Andrea Slattery expressed concern about the quality of insurance advice a superannuation fund trustee will receive regarding their insurance needs.

“It will cause confusion and reinforce the need to have a qualified specialist adviser to talk about insurance in this area,” she said.