The Federal Government considers the Life Insurance Framework legislation a priority, according to Revenue and Financial Services Minister Kelly O’Dwyer.

“We all know the life insurance advice sector has faced scrutiny in recent times,” she told the Financial Services Council annual conference in Melbourne last week.

“Of course, the Government knows the majority of the sector does the right thing.

“But if the sector is to grow, and consumers are to receive appropriate advice, we need to address these issues and concerns.”

Ms O’Dwyer says the legislation was created after consultation with “key industry stakeholders”, but it was stalled when the recent election was called.

“Consultation had also started on regulations to support the legislation,” she said. “With that in mind, the Government will now work through the recommendations made in submissions.

“The life insurance advice reform package remains a priority for the Government and I intend to work closely with stakeholders to ensure its passage through the Parliament.”

Ms O’Dwyer also raised the issue of CommInsure and its coverage in mainstream media, noting the Australian Securities and Investments Commission (ASIC) is investigating.

“ASIC will also consider whether the matters raised in that report are indicative of systemic problems across the life insurance sector that need to be addressed. The Government will carefully consider the findings of ASIC’s investigation.”

Ms O’Dwyer also outlined adviser education standards that will take effect in 2019.

“All new advisers will be required to complete a relevant degree, pass an exam and complete a professional year from January 1 2019. Existing advisers will have a five-year transitional period to reach degree equivalent status.”

Current advisers must pass the exam by January 1 2021, unless exempted.

“At this stage, it is envisaged that the [professional] standards body will have the power to exempt some advisers on a case-by-case basis. However, this exemption from the exam will be reserved for advisers who are exceptionally qualified, and who have many years of experience in addition.”

She says all advisers must also comply with a code of ethics that will come into effect from January 1 2019.

“The code of ethics will be developed by the standards body. Individual advisers will also need to nominate and subscribe to their preferred compliance scheme, which will monitor the adviser’s compliance with the code of ethics.”

Ms O’Dwyer has also promised to enhance the financial adviser register “to provide a mechanism for accountability and transparency”.

“We want a robust framework for improving standards, while also minimising the compliance burden for the industry and for individual advisers,” she said. “Stakeholder feedback from the consultations broadly agrees these objectives will be satisfied.”