I'm often asked about age-adjusted life expectancy by advisers - and doing a recent check I found Fisher Funds has a nice calculator to work it out for you, using good, up to date, New Zealand data. Link.
"Insurers Secret Spy Powers" is the headline this stuff article uses to lure you in and to make policyholders worried about what insurers can do, and by extension, whether they will pay a claim. The day-to-day truth is ordinary.
Although it might be shocking to think of being followed around while going about your business, it does happen, and when you come to think about it, anything one does in public place is usually seen by someone. That's why the law allows private investigators to follow you, after all, they are just getting to see what everyone else sees. So, they aren't exactly secrets.
Neither are they special powers enjoyed by insurers, as the headline of the suggests. If you want to spend your day following someone in public places, you can too. If you want to get someone who is actually good at it to stand in for you, then you, too, can hire a private investigator. Lots of people hire them. Most common of all are employers, who suspect staff are stealing from them; partners, who suspect their lovers are cheating on them; and insurers, who suspect some claimants are being fraudulent.
Of course it is a bit creepy. If I discovered I was being followed it would definitely annoy me. Having said that, I would have to admit that it is legal. Given that the practice is expensive, and can generate negative press headlines like "Insurers secret spy powers". Why do insurers do it?
Fraud. Because with many insurance claims it can be hard to tell from a claim form and a doctor's report whether the claim is real. There are some people out there who will lie on a form and lie to their doctor in order to receive thousands of dollars a month in income protection claims, for example. Unfortunately, because there are some people that do it, probably some people that have perfectly legitimate claims will get investigated too.
The example given in the midst of this article is obviously income protection. The curious feature is that the client was being followed while not on claim. If I had to guess I would say that is because they were suspected of fraud while being on claim, and were considered a risk that they would do it again. The monitoring was probably to establish a baseline of activity while the client was 'at work' to compare with activity while 'on claim' if they claimed again.
Competence proposals by the Code Working Group (CWG), and especially those affecting RFAs are getting quite a lot of attention.
This article in goodreturns highlights that education providers, who might be expected to be in favour of ever higher standards, are worried about the impact.
Partners Life is seeking feedback from advisers and is encouraging them to engage in the consultation process due to concerns about impact on advisers, and how it will affect advice-availability to consumers.
The issues with the proposals are significant. I have covered them in some detail in my quarterly report for institutional clients. They are also the subject of my next article in Asset magazine.
Just backing up the view that commission disclosure will probably be in dollar terms, not percentages, here is the news on KiwiSaver fees disclosure. I think the FMA is unlikely to form a different view for life insurance.
Click here to read the full press release from the FMA.
Asked at an event recently about commission disclosure, I replied with a list of possible or likely requirements, here it is:
- Dollar amount disclosure
- Percentage disclosure
- Disclosure of every entity that takes a share in commission
- Disclosure of soft commissions above a threshold
Comparisons between companies will probably be required, but a focus on variations is probably even more likely. They will be both between which companies you may recommend, and between different actions - such as whether a sale is made or not, and whether a replacement is made or not.
Alongside that, under the new Financial Services Legislation Amendment Bill, it is entirely possible that licence conditions could set out maximum levels of commission which the FMA is comfortable with, deeming higher commissions, or some commission approaches, to be too high a risk.
I have a draft form of commission calculation, based on the commission comparison tool, which can enable you to make quick estimates of the commission payments for typical plans for each of the major insurers for disclosure purposes.
Talking about new ideas is risk-taking activity - people can like them, or hate them. They may bomb, or they may flourish. If you're looking for a breakthrough, you need to be talking to an ideas person. If you're just playing the percentages, then you can sit happily with your incremental changes. Either of those strategies is fine. Here's on that's worse: saying your strategy is risk-taking, but actually only making incremental changes. That just confuses people - your team, your customers, and your business partners.
Talking about your fears is a risk-taking activity. It's different to reacting to your fear. Just reacting tends to focus on the lowest risk option. Conservatism dominates - we know what works, let's argue only for the status quo. But talking about the downsides means you could plan for them. It still shows openness to new opportunities. It is a positive activity. Risk taking and fear-facing requires courage, openness, and honesty. In fact, you could say that a positive attitude towards risk is a kind of test to see if an organisation really has those values, because everyone talks about them, but it can be hard to know how committed they are to them.
Simplified Chinese is the most common language for non-English marketing and product material of insurance. You are also more likely to find it in a bank-owned insurance company than not. With a couple of notable exceptions. Less eye catching, but possibly more powerful, is the strategy of maintaining a register of languages spoken by employees. With about 50% of Auckland's working-age population being born in another country, a couple of insurers have discovered that they already have a large talent pool of linguists to draw on. By maintaining a register of who speaks what they can offer coverage of more than a dozen additional languages to customers who may have limited ability in English. That's a strategy worth considering even in relatively small businesses.
Choosing Wisely is the initiative set up to promote conversations between patients and clinicians to avoid any unnecessary medical tests, treatments and procedures. 'Southern Cross Health Society Chief Executive Nick Astwick says the sponsorship of Choosing Wisely is part of the business’ commitment to giving its members confidence about their health and lifestyle choices.'
Other sponsors of Choosing Wisely are Pacific Radiology and PHARMAC. Campaign partners are Consumer and the Health Quality & Safety Commission, and there is wide sector support – including from DHBs and the Ministry of Health.
Choosing Wisely encourages patients to ask their health professionals these four questions:
Do I really need to have this test, treatment or procedure?
What are the risks?
Are there simpler, safer options?
What happens if I do nothing?
Click here to read more.
The UK Government has a suggested design standard for asking about a person's sex (which is something insurers ask a lot). You can reach it at this link. There is some useful and informative discussion of the issues in the links at the end of the article as well. It is worthwhile remembering that phrasing questions thoughtfully, and by providing more options we can be more welcoming. That applies to trans people, and people that are intersex. It is still an area where successful new norms are still being formed - some of the discussion related to the article contradicts some of the guidance in the article, for example.
Garry Patterson was not registered as a financial adviser, did not belong to a disputes resolution scheme and was a previously convicted fraudster but was practicing as a financial adviser, according to this news report. The charges laid against him were 'failing to disclose he was unregistered when providing financial services, and obstructing the FMA's investigation by refusing to attend an interview without reasonable excuse.' Click here to read more.