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The Border-lands of the Regulated Area

This article about a fine handed down to a "Property Finder" made me think of the item on "Spotters" that I posted last week. This is where there will be much attention over the next year - as Mel Hewitson commented in her blog a few weeks ago. This is also a good way to build confidence and respect with those advisers who got with the programme and became registered.

The comparison of the fine for failing to be registered (in this case $30,000) with the fine for un-professional conduct ($600) is completely beside the point. In the latter case the unprofessional conduct carries with it it's own penalty: the clients probably thought the agent was an idiot and didn't do business with him or her. Whereas the penalty for not being registered needs to reflect the length of time and repeated nature of what might be a long term and considered attempt to circumvent the rules.

Now what I really want to see if a case which clarifies the rather extensive 'normal course of business' exemptions given to real estate agents to give financial advice.


Life Insurance - category 1 versus 2 decision tree

Download Life Assurance Decision Tree Information

I'm republishing this decision tree because I've just had a brief article published over at goodreturns and following a chat with Steve Wright at Onepath I realised I had got some things wrong about whether you can advise on dispose of an old whole if life. I hate that, but sometimes, I get it wrong.

The decision tree is correct, and had I stayed exactly on that page, I would have been fine :-) It goes to show that when something is as complicated as this the right process is to keep the rules right in front of you! So keep this handy.


Good and Bad

Let's start with the good: a feast of grapes has tempted a group of four silver-eyes to visit. I have several excellent photos courtesy of a new camera with a 16x optical zoom. I shall ask Fran to copy me the best and post it. To the bad - The dreadful weather has cancelled ferries and resulted in an hour-long slog into the city.

Psychiatric / Psychological Disability Levels

Ever wondered what bothers insurers so much about the rising tide of Psychiatric and Pschological disorders - and therefore the increasing use of mental health exclusions - it's the incredible shift in numbers that has occurred in such a short space of time. Let's compare two years, the most recent available from Statistics New Zealand:

Year A)     Male:    38,300    Female:    48,100    Total:      86,300

Year B)     Male:    40,500    Female:    63,900    Total:    104,500

Care to guess the length of time it took for a 21% increase to emerge? A generation? A decade?

No, just five years.

Year A was the 1996-1997 study, year B was the 2001 study. Look at the shift for females: a 32% increase.

We need not trouble ourselves to look at the level of population growth over so short a period - even these absolute numbers tell us that something big is happening. Yes, probably a lot more diagnosis. But also, perhaps, a willingness to diagnose and prescribe for something that in the past a person would have trudged on through in life. The experience of insurers is that the defining and medicalising what were once consider minor issues means an increasing number of people that may take time off work, and claim.

Whether you view that as legitimate or not would have to be an opinion formed only after considering a lot more information, although you may have your suspicions. But either way it has a legitimate effect on product design, terms, underwriting and pricing.

Advisers should consider that underwriting processes aren't always getting harder - if these numbers continue it will be come far more common to have such disorders disclosed, and investigations will need to be carried out.

Doctors complaining about insurers intrusiveness in the matter of medical histories need to be aware that it is so much harder to assess these kinds of disorders for severity from the notes than it is with disorders that present more concrete symptoms.

UPDATE:

A friend just tweeted "The Medicalisation of sadness" I couldn't agree more.


Friday Fun

This is, at a stretch, about family risk management.

A teenage boy had just passed his driving test and enquired of his father as to when they could discuss his use of the car. His father said he'd make a deal: 'You bring your grades up from a C to a B average, study your Bible a little, and get your hair cut. Then we'll talk about the car.'

The boy thought about that for a moment, decided he'd settle for the offer, and they agreed on it.

After about six weeks his father said, 'Son, you've brought your grades up and I've observed that you have been studying your Bible, but I'm disappointed you haven't had your hair cut.

The boy said, 'You know, Dad, I've been thinking about that, and I've noticed in my studies of the Bible that Samson had long hair, John the Baptist had long hair, Moses had long hair...and there's even strong evidence that Jesus had long hair.'

His father replied,

'And did you also notice they all walked everywhere they went?'

A teenage boy had just passed his driving test and enquired of his father as to when they could discuss his use of the car. His father said he'd make a deal: 'You bring your grades up from a C to a B average, study your Bible a little, and get your hair cut. Then we'll talk about the car.'

 

The boy thought about that for a moment, decided he'd settle for the offer, and they agreed on it.

 

After about six weeks his father said, 'Son, you've brought your grades up and I've observed that you have been studying your Bible, but I'm disappointed you haven't had your hair cut.

 

The boy said, 'You know, Dad, I've been thinking about that, and I've noticed in my studies of the Bible that Samson had long hair, John the Baptist had long hair, Moses had long hair...and there's even strong evidence that Jesus had long hair.'

 

His father replied,

 

'And did you also notice they all walked everywhere they went?'


Money - Philip Larkin

A love of poetry can rarely be combined with financial services. However, in my newly acquired Collected Poems by Philip Larkin I found Money. It is a pragmatic poem and suprisingly, even brutally relevant to the way most people do, or do not, use their money, and their sometimes shameful indifference to it:

Quarterly, is it, money reproaches me:
    ‘Why do you let me lie here wastefully?
I am all you never had of goods and sex.
    You could get them still by writing a few cheques.’
It is not common for people to write so plainly about the relationship between the amount of money one has and the amount of sex one can get. There are three other verses and I recommend them: the full text of the poem can be found over here.