A life insurance dealer group has dismissed claims the industry has a culture of churning policies.

Synchron director Don Trapnell says his research shows little evidence of the practice among advisers.

“We have not seen any significant statistical data that convinces us that a culture of churning exists in the Australian life insurance industry,” he said.

“Our research into the practices of our own advisers further convinced us that no such culture exists.”

Of about 600 advisers who have been on Synchron’s books, Mr Trapnell says only two were involved in churning.

“That is a percentage of 0.33%. Of course, we dismissed both of these advisers.”

He argues proposed clawback provisions are too restrictive for advisers who may play no role in policies lapsing.

“One of the biggest problems with the clawback provisions is inequity,” he said.

“There are times when the adviser has no part in the policy lapsing and yet, under these provisions, it is the adviser who will pay, literally.”

Mr Trapnell likens advisers losing clients to politicians losing elections. 

“Clients, like voters, can vote with their feet and move on to another adviser for any number of reasons.

“Under the clawback provisions, if clients do move on, the original adviser will have to pay back part or all of their past income.

“We wonder how politicians would respond if they were forced to repay part or all of their parliamentary salary after losing an election.”