The Council of Australian Life Insurers (CALI) is pressing the federal government to carve out life insurance from any sweeping crackdown on lead generation in the financial services sector, arguing that such a move would make it harder for consumers to find and compare cover. CALI CEO Christine Cupitt said the industry’s concern is that reforms designed to address misconduct in superannuation could inadvertently capture distribution channels that function differently and serve a legitimate purpose in the life insurance market. “Life insurance lead generation plays an important role in helping customers access information, compare products, and obtain life insurance protection. A blanket ban for life insurance risks limiting legitimate information and connections that support customers to build their financial safety net,” Cupitt said.
The government’s interest in overhauling lead generation rules stems from the failures of the Shield and First Guardian Master Funds. Assistant Treasurer Daniel Mulino said in April 2026 that the two collapses affected more than 11,000, with losses exceeding $1 billion in superannuation savings. Federal Court proceedings and investigations by the Australian Securities and Investments Commission (ASIC) and liquidators are ongoing.
Treasury documents released alongside the consultation describe a chain of conduct in which lead generators referred superannuation fund members to financial advisers, who then directed those members to roll over their savings into self-managed super funds or funds that channelled money into managed investment schemes. Regulators allege the arrangements involved conflicted payments between parties, pressure-based selling, and governance failures at the trustee level.
In response, the government released three consultation papers covering superannuation member protections, lead generation, and the Compensation Scheme of Last Resort (CSLR). On lead generation specifically, the government canvassed options including tighter accountability requirements for lead generators, restrictions on unsolicited selling, a potential ban on unlicensed communication to consumers about superannuation, and earlier regulatory intervention in harmful advertising.
CALI’s position is that the conduct underpinning the Shield and First Guardian failures was concentrated in superannuation and does not reflect how lead generation works in life insurance. Cupitt said that restricting or banning lead generation in life insurance would cut off the flow of consumer inquiries from comparison websites – one of the more common ways people research what cover they might need. “One in two Australians want personalised advice about life insurance and more people are turning to online tools, including market comparison sites, to learn about life insurance,” Cupitt said. She framed the comparison website channel as a regulated and consumer-initiated pathway, distinct from the unsolicited outreach that regulators have identified as problematic in the superannuation context. “The government should not cut off safe, regulated pathways that help Australians access life insurance,” she said.
CALI has put forward two criteria it says should define the scope of any exemption from lead generation restrictions. Under the proposal, the exemption would apply where the activity is conducted for the sole or dominant purpose of promoting, referring, or facilitating access to a life insurance product or service, and where the party initiating the lead generation complies with the Corporations Act, ASIC Act, Privacy Act, and other relevant consumer protection legislation. The industry body argued these boundaries would prevent the exemption from being used to shield harmful conduct while keeping the door open for consumers to connect with providers through legitimate channels. “This approach keeps reforms tightly focused on harmful conduct while preserving legitimate customer access to life insurance protection,” Cupitt said.
CALI also called on the government to release the full Delivering Better Financial Outcomes legislation within weeks, saying the delay was creating uncertainty for the industry as the reform process moves toward conclusion. “Australians need easier access to life insurance, not more barriers,” Cupitt said. The consultation period on the government’s three reform papers closed May 22, 2026. Mulino said the government would weigh the feedback and pursue a set of targeted reforms that balance consumer protection against the risk of future fund collapses and the right of individuals to exercise choice in the superannuation system. A second roundtable on the CSLR and consumer protection was also flagged before the government finalizes its position.
