The National Insurance Brokers Association (NIBA) has called for a post-implementation review of the Future of Financial Advice (FOFA) reforms.

It wants the Federal Government to look at the impacts of the legislation after FOFA’s implementation, which is currently set for July 1 this year.

In a further submission to the Parliamentary Joint Committee on Corporations and Financial Services on FOFA, NIBA says the Government has not prepared a comprehensive regulatory impact statement to see what impact the bill will have on the financial services industry.

“Where a comprehensive regulatory impact statement has not been prepared or is not sufficiently comprehensive, government policy requires a post-implementation review which is to be undertaken within one or two years of [the legislation] being implemented,” NIBA says in its submission.

“Issues to be examined in any review include problems that the regulation was intended to address; objectives of the Government action; impacts of regulation and whether the Government’s objectives could be achieved in a more efficient and effective way.”

The association argues the two FOFA bills should be subjected to this scrutiny to avoid any “unintended impact” on the insurance industry.

“NIBA remains concerned the proposals will have unfortunate and unintended consequences for stand-alone life insurance products which do not have an investment component,” it said.

“Proper consideration of these issues and concerns now, rather than after the fact, is important.”

NIBA notes the new “best interests” duty will create additional compliance costs for general insurance brokers, but will be more onerous for life insurance advisers.

It also calls for better wording of the clause in the bill that does not require a broker or adviser to consider products outside the organisation for which they are working.

“This needs to be considered further and be better qualified, as the end advice must still be appropriate and other obligations beyond the Corporations Act would need to be considered by any insurer giving personal advice to a customer.

“NIBA’s understanding is that the intent is to maintain essentially the same position as that which currently exists in the general insurance personal advice space.

“If this is not the case, this would be of grave concern.”