Insurance Advice

Question 1(a) (9 marks | Word limit: 300 words)

LO4: Apply financial planning duties while giving consideration to ethics and the legal and regulatory responsibilities owed by the planner and the planner’s organisation to the planner’s clients and other stakeholders.

Consider the purpose or objective of each of the following key pieces of legislation that regulate the insurance industry:

• Insurance Act 1973 (Cth)
• Insurance Contracts Act 1984 (Cth)
• Life Insurance Act 1995 (Cth).

Evaluate and discuss the relevance of each Act to the behaviour of a financial adviser providing insurance advice. (9 marks)

Question 1(b)                         (6 marks | Word limit: 200 words)

LO4: Apply financial planning practice while giving consideration to ethics and the legal and regulatory responsibilities owed by the adviser and the adviser’s organisation to the adviser’s clients and other stakeholders.

Outline a list of steps in the insurance advice process up until the issue of a life insurance policy, indicating at each step, if an adviser should take the opportunity to remind a client of their duty of disclosure, and the reasons why it is important to do so.

You can set out your answer in table format or diagrammatically.

Question 2     (4 marks | Word limit: 150 words)

LO4: Apply financial planning practice while giving consideration to ethics and the legal and regulatory responsibilities owed by the adviser and the adviser’s organisation to the adviser’s clients and other stakeholders.

There are eight key components of the Corporations Act 2001 (Cth) identified in your subject notes. Evaluate and explain how four (4) of these components play a role in supporting the appropriate conduct of advisers, to ensure positive outcomes for clients.

Section B (22 marks)

Question 1                  (6 marks | Word limit: 200 words)

LO4: Apply financial planning practice while giving consideration to ethics and the legal and regulatory responsibilities owed by the adviser and the adviser’s organisation to the adviser’s clients and other stakeholders.

LO5: Evaluate contemporary issues in insurance advice.

The Treasury Laws Amendment (Putting Members’ Interests First) Act 2019 (Cth) came into effect from 1 April 2020. Evaluate the impact of this law on the advice you provide to clients who are under 25 years old.

Question 2                  (16 marks | Word limit: 600)

LO4: Apply financial planning practice while giving consideration to ethics and the legal and regulatory responsibilities owed by the adviser and the adviser’s organisation to the adviser’s clients and other stakeholders.

The five Future of Financial Advice (FOFA) reforms that became mandatory on 1 July 2013 were intended to increase consumer protection, while simultaneously requiring financial advisers to meet higher standards of care and skill.

Explain how each of the five key reforms can influence financial advisers’ ethical behaviour by providing an example for each reform from your own, another or a fictitious practice.

Section C (24 marks)

Question 1                  (16 marks | Word limit: 500 words)

LO5: Evaluate contemporary issues in insurance advice.

Select one of the contemporary advice issues discussed in Topic 3, section 3. Evaluate and explain how this issue could influence the way insurance advice is provided to clients. You can select a broad issue or a specific element from a review that you believe could have a significant impact.