Life Insurance Framework

The Life Insurance Framework (LIF) remuneration rules came into effect on 1 January 2018.
MLC Life Insurance is committed to working with financial advisers and supporting the adoption of these important industry changes. You'll find updates relating to LIF as we continue to develop content relevant to your business.

What's changing?

New Business Commission rates

 Commission structure Initial rate Renewal rate
1 year (initial) Responsibility Period
Level  31% 31%
2 year (initial) Responsibility Period
Hybrid (2018) 88% 



Hybrid (2019) 77% 
Hybrid (2020 onwards)  66% 

All rates include GST. Commission is payable on modal loadings. Commission is not payable on any government stamp duty charges.

Clawbacks for cancellation (Responsibility Periods)

Please note: There are specific clawback rules that apply where there is a reduction in the policy cost.

From insurance start date:
Up to 12 months 100% (Level (pro-rata) & Hybrid)
12 - 24 months 60% (Hybrid only)
For policy increases:
(Note: existing clawback arrangements continue to apply)

Up to 12 months 100% (Level (pro-rata) & Hybrid)

For increases in the first year, a 60% clawback rate also applies where the cancellation occurs more than 12 months after the increase but before the end of the second year of the insurance policy.

Clawbacks don't apply for certain events such as:

  • Life insured reaches benefit expiry age
  • A claim is paid

Also, no clawback will apply for premium reductions due to a new discount or premium rate reduction.

What about existing clients and in-flight applications?

Grandfathering (commission rates and responsibility periods for existing business)

The pre-LIF commission rates and responsibility periods will apply to life risk insurance policies that are:

  • issues prior to 1 January 2018; or
  • applied for prior to 1 January 2018 (i.e. completed applications are received by MLC Life Insurance) and are issued on or before 31 March 2018. (Referred to as 'Grandfathered Policies').

For Grandfathered Policies:

  • Certain increases in cover and additions will also have commission paid on pre-LIF commission terms provided that option was available under the terms of the pre-LIF policy document terms or product disclosure statement; and
  • Pre-LIF clawback rules will continue to apply.

What is MLC doing to help you and your clients?

Base premium guarantee (pricing certainty for clients)

Base premium rates on existing retail life insurance policies stay the same until at least 1 October 2018. The pricing guarantee also extends to new customers from 9 October 2017. We will guarantee their premium rates until January 2020 and limit potential future premium rate increases to a maximum of 10% until 1 January 2022.

Aligning our commission rates

We've increased our Hybrid rates for 2018 to the maximum allowable commission rate under LIF to 88% (including GST) for upfront commission.

Investing in business efficiency

We're investing in new technology like the globally recognised underwriting rules engine UnderwriteMe - delivering business efficiencies to lower the cost of providing advice to your clients.

Frequently asked questions 

If you still have questions about the Life Insurance Framework view the Life Insurance Framework FAQs.