Access to information about relevant insurance products

6.17 To improve access to information about relevant insurance products the ALRC recommends that IRAG, or a similar body, consider the development of a central information source. The source should provide mature age workers and volunteers with clear and simple information about insurance products relevant to their participation in paid employment or volunteering.

6.18 Mature age workers, like all consumers, have a level of individual responsibility for sourcing and comparing insurance policies. However, if lack of awareness is contributing to perceptions of age discrimination in insurance, or is acting as an additional insurance-related barrier to workforce participation, the development of information sources is a constructive option for reform.

6.19 A number of comments from respondents received as part of a 2012 survey by National Seniors Australia and COTA on ageism in travel insurance, noted difficulties in understanding and comparing insurance policies:

The schedules of what is covered and what is not are very difficult to compare as the insurance companies tend to use different and confusing language to describe the same thing.[27]

6.20 Another respondent suggested that ‘it would be useful to have a website for travel insurance where one specifies their requirements and a list of qualifying requirements are displayed’.[28]

6.21 The Financial Services Council (FSC) acknowledged that ‘it is likely that awareness of the range of products that are presently available for older Australians may be low’.[29]

6.22 There are a number of existing sources and initiatives in this area, including MoneySmart,[30] and the Consumer Referral Service (CRS) launched by the ICA in 2012. The CRS provides contact details of insurers, including a listing for ‘Seniors Travel Insurance’.[31] These sources could be revised, or could contribute to the development of a new central information source, to provide mature age persons with clear and simple information about available insurance products.

6.23 Suncorp acknowledged the limitations of the current CRS and indicated it is ‘committed to supporting the ongoing enhancement of the portal’.[32] If the CRS is extended or used as a model, Suncorp suggested that ‘enhanced search capabilities to meet the needs of consumers from diverse backgrounds will be an important function for inclusion in the portal going forward’.[33]

6.24 In addition, any such source should be accessible for all members of the community, including people with disability, Indigenous people and members of culturally and linguistically diverse communities. In developing such a source a number of practical issues would also need to be considered. These include: cost; responsibility for ongoing updates and maintenance; and the most appropriate ways to distribute such information in hard copy.[34]

6.25 Ideally, the information incorporated should extend beyond provision of contact details of insurers to include, for example: the products available; the terms of cover; and any age-related restrictions. However, general insurers sell on a ‘no advice’ model.[35] Insurers have submitted that obligations governing the provision of financial advice limit their ability and willingness to provide information to mature age consumers that may be considered general or personal advice rather than factual information.[36] For example, Suncorp suggested that such obligations and resulting uncertainty results in ‘a generally conservative approach being taken in the provision of information’ by insurers.[37] In addition, while the FSC indicated it is ‘supportive of initiatives to improve consumer awareness and accessibility of life insurance products offered by its members’, it submitted that

it is important to ensure that any proposals with respect to the centralisation of product-specific information are balanced with the appropriate consumer protection in light of regulatory requirements for product issuers in regard to obligations that limit the provision of personal versus general advice.[38]

6.26 The definition and scaling of factual information, general and personal advice is the focus of the ‘Future of Financial Advice’ reforms.[39] Consideration of these issues is broader than the scope of this Inquiry. However, insurer concerns and the effect these have on assistance provided to mature age persons seeking insurance need to be considered in the course of developing the central information source. The ALRC welcomes developments that will facilitate the provision of clear and simple information to all people seeking insurance, including mature age persons.[40]

Recommendation 6–1 The Insurance Reform Advisory Group, or a similar body, should facilitate the development of a central information source to provide mature age persons with clear and simple information about relevant and available insurance products.

[27] National Seniors Australia and COTA, Ageism in Travel Insurance 2012 Survey Report (2012), 24.

[28] Ibid.

[29] Financial Services Council, Submission 89.

[30] ASIC, MoneySmart <> at 21 March 2013.

[31] Insurance Council of Australia, Find an Insurer <> at 21 March 2013. The service is similar to the British Insurance Brokers’ Association ‘Find a Broker’ service and website: British Insurance Brokers’ Association, Find an Insurance Broker <
aspx> at 21 March 2013.

[32] Suncorp Group, Submission 66.

[33] Ibid.

[34] See, eg, Insurance Council of Australia, Submission 94.

[35] For example, Corporations Act 2001 (Cth) ch 7; ASIC, Regulatory Guide 36: Licensing Financial Product Advice and Dealing (April 2011); ASIC, Regulatory Guide 146: Licensing: Training of Financial Product Advisers (July 2012); ASIC, Regulatory Guide 175: Licensing: Financial Product Advisers—Conduct and Disclosure (December 2012).

[36] An Australian Financial Services (AFS) licence is not required to provide factual information regarding a product to customers. However, providing general or personal financial advice does require an AFS licence, and is the subject of obligations under the Corporations Act 2001 (Cth) and the supporting Regulatory Guides issued by the Australian Securities and Investment Commission. See, eg, Insurance Council of Australia, Submission 94; Financial Services Council, Submission 89; Suncorp Group, Submission 66.

[37] Suncorp Group, Submission 66.

[38] Financial Services Council, Submission 89.

[39] Treasury, Future of Financial Advice Reforms <
aspx?doc=home.htm> at 21 March 2013.

[40] For example, ICA submitted that it has ‘had productive discussions with ASIC on how tailored information can be provided to a customer without triggering general or personal advice obligations. We are hopeful that the regulatory guidance which ASIC issues on this subject will facilitate the provision of clear and simple information which will help consumers make better insurance purchasing decisions’: Insurance Council of Australia, Submission 94. See also Tasmanian Anti-Discrimination Commissioner, Volunteers, Age and Insurance (2013), Unpublished Report, rec 14.