AFA News 21 May 2021. On 12 May 2021, APRA issued a letter to life insurers on extending the timeframe for the implementation of one of the key measures in their IDII Intervention. APRA has proposed that life insurers should be required to “refresh” life insurance policies at least every five years. This will involve underwriting again for occupation and pastimes, but not for medical purposes. At the time of “refresh”, the new policy must reflect the terms and conditions applicable to new contracts on offer at that time. This measure was due to come into force from 1 October 2021, however, it has now been deferred until 1 October 2022.
APRA has acknowledged the challenges associated with implementing the policy contract term measure and the time needed to formulate viable solutions, meaning an extension was essential.
The other IDII intervention measures on the definition of income at risk, income replacement ratio caps and controls on long benefit periods will continue to apply from 1 October 2021.
Click here to read the APRA letter.
Issued 21.05.2021. AFA Policy & Education Update