The Institute fully supports Government’s steps to address the financial advice gap in Australia, where many consumers cannot access or afford full personal advice. Overall, and subject to a few qualifications around superannuation trustee certainty, advice through superannuation limitations and targeted superannuation prompts, the Institute believes these reforms represents positive developments which should increase access to and affordability of financial advice and guidance.

The Institute supports effectively regulated capital markets, both public and private, in Australia and globally. In relation to private markets, our main concern is that some retail investors may not fully understand what they are purchasing. To support informed retail investor participation, more transparency of fees, risks and performance will help consumers compare the different investments across private and public market options.

The Institute broadly supports the ‘payday super’ exposure draft legislation to require employers to pay their employees’ super at the same time as their salary and wages and to help ensure individuals receive the Superannuation Guarantee (SG) contributions to which they are entitled. Focusing on appropriate treatment of individuals with defined benefit (DB) interests, we recommend that the SG compliance test for accumulation members in DB arrangements be based on the employer contributions actually paid (or credited from reserves).

The Institute supports the Government’s decision to ban adverse genetic test results in life insurance underwriting. This will give the Australian community certainty and assurance on the way forward and support medical advances that can benefit society in many potentially profound ways. As genetics research is a rapidly advancing field, we recommend policy that can adapt to the advances in genetics so that life insurance balances accessibility of insurance and equity to the insured population as a whole.

Reinsurance is a critical element of risk management for general insurance. The Institute welcomes the opportunity to provide feedback on reinsurance settings to assist in maintaining access for Australian insurers to global reinsurance arrangements and high-quality alternative protection markets.

In its Pre-Budget submission for 2025\26, the Institute supports measures to: target cost of living relief; increase investment to capture opportunities and build resilience against climate change and technological shifts (including AI, cyber risk, and quantum computing); progress reforms in healthcare funding, the retirement income system, and disability and rehabilitation schemes; consider future tax reform to address inequality; and further invest in education to support a future STEM workforce.

The Institute is highly supportive of inclusion of ‘Climate change adaptation and resilience’ as one of the six headline ambitions for the taxonomy. We support its inclusion as a DNSH criteria, through consideration of a physical climate risk assessment using at least two relevant scenarios. We are concerned there is no clear timetable for when adaptation and resilience will be considered and believe delaying creates significant risks for insurance affordability, the required investment and action on adaptation and resilience, and the overall costs of the net zero transition.

Given the significant financial risk involved in home building, it is critical for societal resilience that Home Building Compensation schemes remain efficient and effective. We set out six key areas we encourage the Review to consider, including: an increased maximum cover to reflect contemporary building costs; reviewing the maximum cover for incomplete work; and protection for ‘no fault’ owners who find themselves uncovered.

Responding to Treasury's review of AI and Australian Consumer Law, the Institute has drawn on recommendations made in prior extensive submissions to Government on AI including the need for regulation to be outcomes focused, prioritisation of existing regulation and guidance rather than new regulation and the creation of a centralised expert body to consider AI governance, regulation and guidance.

The Institute supports the proposal to remove obstacles to winding up legacy retirement income products and to create a more flexible avenue for allocations from superannuation reserves. Introducing this flexibility would enable members with legacy products to rationalise their superannuation without compromising the integrity of the superannuation system.

The Institute acknowledges the complexities of regulating AI systems, welcoming the acceptance of the OECD definition of AI systems and more detailed outline of risk dimensions for AI systems. We recommend further refinement of the proposed guardrails including more detail in the risk classification system and an understanding of the costs associated if the guardrails are implemented.

The Institute suggests that priority be given to improving the YourSuper Comparison Tool to better help members make informed investment decisions by including an investment risk metric. We submit that incorporating an appropriate investment risk metric offers clear net benefit to informing better risk-adjusted decisions.

The Institute supports ASIC’s proposal to update the rate of nominal wage inflation in ASIC (Superannuation Calculators and Retirement Estimates) Instrument 2022\603 and Regulatory Guide 276 in view of Treasury’s revision of long-term wage growth forecasts from 4.0% to 3.7% p.a. to align with the 2023 Intergenerational Report. We also support the proposed period of transition to 31 December 2024 where providers can adopt either the existing default nominal wage inflation rate or the revised rate.

Climate risk is one the greatest challenges and opportunities for all countries. While some of the risks of overall increased adverse weather conditions and events have begun to be realised, there is significant uncertainty over future decades. Because insurance is a critical part of resilience, it is a critical enabler for economies to function well. This submission provides a response to all the Terms of Reference of the Inquiry.

The Institute supports the inclusion of ‘Climate change adaptation and resilience’ as one of the six headline ambitions for the Australian sustainable finance taxonomy. To support a broader focus of the taxonomy beyond climate change mitigation, the Institute strongly recommends that AFSI includes climate resilience and adaptation measures into the technical screening criteria for ‘construction and the built environment’.

The Institute seeks a legislative remedy to address regulatory constraints which inappropriately restrict the provision of superannuation actuarial advice on certain matters. The constraints result in a growing risk that superannuation fund trustees and employer sponsors will be unable to obtain this advice from an actuary, and which are necessary to help superannuation fund trustees and employer sponsors support fund members’ interests.

The Actuaries Institute welcomes the opportunity to provide this submission to the Senate Community Affairs References Committee’s Inquiry into Excess Mortality. The comments draw on the extensive work of the Institute’s Mortality Working Group to analyse pandemic-related data to inform the actuarial profession, the industries they advise, and policy discussions, which focus on the excess mortality experience in Australia during the period 2020 to 2023.

The Institute supports APRA’s ongoing role in the collection and reporting of industry data, the evolutionary approach it proposes to take and, more generally, the continuing development of insurance industry statistics. However, we encourage APRA to release additional information in general and life insurance beyond what is proposed to ensure its statistical publications support all stakeholders being well informed and provide further commentary regarding the proposals for private health insurance statistical publications.

The Institute supports the abolition of the Emergency Services Levy (ESL) and its replacement with a more equitable source of revenue collection. Reform of the ESL and replacement of other insurance taxes has been called for by the Institute for some years, as one of the most immediate steps that can be taken to address home insurance affordability and availability in NSW, and thereby improve societal resilience.

The Institute supports the expected outcomes of the proposed amendments to SPS 114 and SPG 114, that is to better position RSE licensees to use the Operational Risk Financial Requirement actively for its intended purpose, while also simplifying its implementation. The Institute recommends further guidance in SPG 114 to support RSE Licensees to take an evolutionary approach to bringing the sophistication of integrated risk, capital and reserve management in the superannuation fund industry closer in line with the other APRA-regulated sectors (i.e., insurance and banking) over time.