Understand how current and upcoming changes to regulations could affect your insurance.

The Federal Government has made a large number of changes to life insurance regulations, and this may affect the life cover you have with AMP Life. We’ve put together a summary of these changes to help you understand what the changes are and what they could mean for your insurance.

Emerging changes

 The change The details – and what they may mean for you

Member outcomes assessment

1 January 2020

A new law has been introduced making it compulsory for super trustees to assess their members’ outcomes get each year. They must make sure they meet their members’ financial interests by:

  • reviewing their super against comparable products in other funds
  • assessing the fund as a whole against specific benchmarks
  • making sure each MySuper product has an investment strategy.

Protecting Your Super (PYS)

Ongoing since 1 July 2019

The PYS law was introduced to help members save for their retirement, by reducing unnecessary fees and charges. If your super account has a balance below $6,000 and has received no contributions or rollovers for at least 16 months:

  • your account will be closed, with the balance sent the Australian Taxation Office (ATO), who will either move your funds into one of your active super accounts or wait for you to claim it.
  • your insurance will be cancelled.

Putting Members' Interests First (PMIF)

1 April 2020

This law was introduced to reduce insurance fees paid through super for younger members.

  • If your super account doesn’t receive any contributions or rollovers for at least 16 months, your insurance will be cancelled – unless you instruct your fund to keep it.
  • If you’re under 25 and you open a new super account, you’ll need to ask your super fund to provide insurance cover.
  • If you’re under 25 and have a dangerous job (e.g. mining), you’ll automatically receive life insurance through your super – unless you instruct your fund to cancel it.

 Life Insurance Code of Practice

1 July 2022

 There will be a new version of the Financial Services Council (FSC) Life Insurance Code of Practice. The new version is designed to improve product design, sales, underwriting, customer service and claims handling for all insurance members.

Royal Commission recommendations

Based on the findings of the Royal Commission, some new laws are being introduced to help make insurance fairer and more transparent for everyone.

The change The details – and what they could mean for you

Duty to take reasonable care not to make a misrepresentation to an insurer

30 June 2020

Currently, in the Insurance Contracts Act, when taking out cover the consumer is responsible for fully disclosing all the information that an insurer needs to know to assess their level of risk.

In future, it will be the insurer’s responsibility to ask the right questions. In a consumer insurance contract, the ‘Duty of disclosure’ section will be replaced with a ‘Duty to take reasonable care not to make a misrepresentation to an insurer’.

Application of unfair contract terms provisions to insurance contracts

1 July 2020

 Unfair contract terms (UCT) in the ASIC Act apply to most industries that use contracts with consumers, but not to insurance products. But from 1 July 2020, they will also apply to insurance contracts, giving consumers more protection when they enter into a contract with an insurer.

Responses from the regulator

Life insurance in Australia is regulated by The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC). The latest responses from our regulators may lead to changes in some life insurance products. Here’s what you should know:

The response The details – and what they could mean for you
ASIC Total and Permanent Disability (TPD) Report ASIC has found that there are issues with the way total and permanent disability (TPD) insurance is designed and the way claims are handled. They have identified a number of actions that insurers must take to ensure TPD products provide better value to their members.

APRA Disability Income Insurance (DII)

31 March 2020

 Over the last five years, insurers have been incurring heavy losses on disability income insurance (DII) – leading to sharp rises in the costs of premiums. This situation is unsustainable for both for policyholders and insurers alike. The APRA DII changes will help to make the DII industry sustainable and enable Australians to continue to protect themselves and their families from illness and injury.

AMP Life is currently working on actions to address the changes to these insurance laws. Our aim is to improve the claims process for all our customers and help the affordability of insurance.

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If you have any questions about your insurance, speak to your financial adviser or call AMP Life.

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Important information

AMP Life Limited (AMP Life) ABN 84 079 300 379 has provided this information, which is general information only and hasn’t taken your circumstances into account.

It's important to consider your particular circumstances and read the relevant product disclosure statement before deciding what’s right for you.

Read our Financial Services Guides for information about our services, including the fees and other benefits that AMP Companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.

This article refers to life insurance products generally and features may not be applicable to the product you hold. Please contact AMP Life of your financial adviser to discuss your specific policy details.