percentage of the premium income. So we wanted to make sure on all cases, regardless of the level of the premium, there was a flat dollar amount paid, as opposed to a variable commission. But why did you want to do that?That was to stop the potential for policies to have high sums insured. Can I ask you to look at a document that I showed to you yesterday, which is SAF.0004.0001.0220. This was the internal file note dealing with the investigation of what occurred in 2015. And could I ask you to look at paragraph 10 on page 0221. Could I ask you to look, firstly, at paragraph 9: Since 2015, Select has made a number of changes that collectively would reduce the likelihood of the factors that led to the sales spike reoccurring, and/or identifying the emerging trend earlier, including stricter rules around refer a friend. Sales agent remuneration practices have evolved to better align with the interests of customers and Select’s commercial interests (refer further details set out below) and the quality assurance and compliance framework has been evolved and strengthened. And then if we look at what appears below in paragraph 10, we see a reference to remuneration: During 2015, sales agents were remunerated on a percentage of the annual premium income of each policy sale. The current sales agent remuneration arrangements are based on a fixed amount per policy. Adding the coverage of additional family members under the policy no longer results in additional commission. Do you see that?That’s correct. Now, is this one of the if we have both paragraph 9 and 10 on the screen, was that – one of the changes implemented to better align the remuneration practices with the interests of customers?That’s correct. Because of a potential conflict of interest that that previous remuneration structure created?But I would like to point out that, certainly with the children, the premium was not a huge component. It’s a much smaller component. As a proportion, the commission is a much smaller component. But, nonetheless, you moved ?But nonetheless ..... yes away out of recognition that remuneration practices were not well aligned with the interests of your customers?Correct. Thank you. Now, that move to a different commission structure happened in about August 2016?That’s correct.
percentage of the premium income. So we wanted to make sure on all cases, regardless of the level of the premium, there was a flat dollar amount paid, as opposed to a variable commission. But why did you want to do that?That was to stop the potential for policies to have high sums insured. Can I ask you to look at a document that I showed to you yesterday, which is SAF.0004.0001.0220. This was the internal file note dealing with the investigation of what occurred in 2015. And could I ask you to look at paragraph 10 on page 0221. Could I ask you to look, firstly, at paragraph 9: Since 2015, Select has made a number of changes that collectively would reduce the likelihood of the factors that led to the sales spike reoccurring, and/or identifying the emerging trend earlier, including stricter rules around refer a friend. Sales agent remuneration practices have evolved to better align with the interests of customers and Select’s commercial interests (refer further details set out below) and the quality assurance and compliance framework has been evolved and strengthened. And then if we look at what appears below in paragraph 10, we see a reference to remuneration: During 2015, sales agents were remunerated on a percentage of the annual premium income of each policy sale. The current sales agent remuneration arrangements are based on a fixed amount per policy. Adding the coverage of additional family members under the policy no longer results in additional commission. Do you see that?That’s correct. Now, is this one of the – if we have both paragraph 9 and 10 on the screen, was that one of the changes implemented to better align the remuneration practices with the interests of customers?That’s correct. Because of a potential conflict of interest that that previous remuneration structure created?But I would like to point out that, certainly with the children, the premium was not a huge component. It’s a much smaller component. As a proportion, the commission is a much smaller component. But, nonetheless, you moved ?But nonetheless ..... yes away out of recognition that remuneration practices were not well aligned with the interests of your customers?Correct. Thank you. Now, that move to a different commission structure happened in about August 2016?That’s correct.