APRA Postpones Changes to Individual Disability Income Insurance Policy Terms
APRA Postpones Changes to Individual Disability Income Insurance Policy Terms
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The Australian Prudential Regulation Authority (APRA) has announced a suspension of the planned changes to individual disability income insurance (IDII) policy contract terms.
Originally set to take effect from 1 October 2022, the implementation has been deferred for at least two years, providing insurers and policyholders additional time to adapt to the forthcoming regulations.
The proposed changes aimed to introduce five-year contract terms for IDII policies, requiring policyholders to undergo underwriting assessments at each renewal. This measure was intended to address sustainability concerns within the IDII market by aligning premiums and coverage with the policyholder's current circumstances. However, industry stakeholders raised concerns about potential unintended consequences, such as policyholders losing coverage due to changes in health status or employment conditions.
In response to these concerns, APRA has decided to suspend the implementation of the policy contract term measure. This suspension allows the industry to develop solutions that meet APRA's expectations for sustainable contract terms without adversely affecting policyholders. During this period, existing IDII policies will continue under their current terms, providing stability for both insurers and insured individuals.
APRA's decision reflects a commitment to balancing the need for sustainable insurance products with the protection of policyholders' interests. The authority will continue to monitor developments in the IDII market and engage with industry participants to ensure that future changes are implemented effectively and equitably.
Policyholders are encouraged to stay informed about potential changes to their IDII policies and consult with their insurers or financial advisers to understand how future adjustments may impact their coverage and premiums. Maintaining open communication with insurers will be crucial in navigating any forthcoming changes in the IDII landscape.
Published:Friday, 20th Feb 2026 Source: Paige Estritori
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Income Insurance: Insures your income in the event of you being unable to work due to sickness or accident.
