LIfe Insurance Commissions - a balanced perspective
I don't often re-post articles from other sources, but this appeared when many people may still have been on leave, and I thought it definitely worth sharing. The item presents a cogent and articulate response to the rather one-dimensional - some would say myopic - reports and recommendations from the Trowbridge and Melville Jessup Weaver documents released last year.
With specific reference to the MBIE Options Paper - s4.6 - in relation to "commissions and any other conflicts of interest", I'd suggest that the existence of commission does not represent a conflict of interest.
Rather it is the behaviour of some individuals towards the existence of commission that represents the conflict, and it is this behaviour that should be addressed in the FAA review process.
As there has been no empirical evidence presented of the existence of commission creating 'churn' - the inappropriate termination and replacement of one life insurance policy with another to the detriment of the policyholder - this article is an excellent positioning statement for those seeking a balanced view on the subject.