CALI seeks life insurers exemption from lead generation ban

The Council of Australian Life Insurers (CALI) said it will argue a strong case for exemption for life insurance lead generation to not be swept up into a blanket ban designed to address misconduct in other parts of the financial system.

The government recently consulted on prescribing certain lead generation activities as a type of financial service, where those activities influence consumer decision making in relation to financial products or services.

Treasury said it would also target specific actions of lead generators that are problematic, being the advertising to attract consumers and cold calling.

Former ASIC chair Joe Longo has said the most effective way to tackle unscrupulous actors in lead generation activity would be to stop it at the source and ban all unlicensed communications.

CALI chief executive Christine Cupitt said a blanket ban would reduce customer choice and restrict Australians' access to life insurance.

"Life insurance lead generation plays an important role in helping customers access information, compare products and obtain life insurance protection," Cupitt said.

"A blanket ban for life insurance risks limiting legitimate information and connections that support customers to build their financial safety net."

Cupitt added a blanket ban would prevent life insurers from receiving customer enquiries from comparison websites, a popular and convenient way for customers to access basic information about financially protecting themselves and their loved ones.

"One in two Australians want personalised advice about life insurance and more people are turning to online tools, including market comparison sites, to learn about life insurance," Cupitt said.

Lead generation from these sites provides a safe and quick way for potential customers to get more information about the life insurance products that might suit their needs, CALI said.

"The government should not cut off safe, regulated pathways that help Australians access life insurance," she said.

"Australians need easier access to life insurance, not more barriers."

The industry body, however, noted exemptions should apply where lead generation is undertaken for the sole purpose of promoting, referring or facilitating access to a life insurance product and the initiating party complies with obligations under the Corporations Act, ASIC Act, Privacy Act and other consumer protection laws.

"This approach keeps reforms tightly focused on harmful conduct while preserving legitimate customer access to life insurance protection," Cupitt said.