Under the reforms, due to be effective from 1 July 2015, AMP is slashing upfront commissions paid to advisers on new life insurance products through a new payment structure.
The new remuneration model will cap year one commissions on life insurance policies to 80% along with a 20% annual commission payment during the life of the policy.
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AMP advisers will be able to access this year one commission once every five years per policy, irrespective of the life insurance provider and applicable to all insurance policies written since 1 July 2010.
At the same time, the licensees’ approved product lists will adopt a similar remuneration model with all life insurance products (including non-AMP products) adhering to the new model and five year rule.
AMP chief executive Craig Meller said, "It is clear the Australian life insurance industry needs to reform in order to help restore customer confidence.
"This confidence is essential for AMP to achieve its most important objective – offer financial advice to help people improve their lives. These changes, which are initial steps towards a fee for service model, support this objective."
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