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World AIDS Day

This Friday the 30th of November is World Aids Day. 42% of Kiwis say they would feel uncomfortable eating food prepared by someone living with HIV, and 46% of New Zealanders would be uncomfortable letting their child play with a child living with HIV. That's a shame, disease is conquered by science, not by prejudice. The major aim of World AIDS Day for NZAF is to help end HIV stigma. That would help a lot in terms of getting the right things done - people getting tested, taking steps to prevent the spread of the disease, and eventually we can end HIV. The insurance industry has some way to go to help out - we could change policy wordings and cover HIV, as has been shown by AIA's recent changes to their medical policies.


Congratulations to CIGNA

Today, 30 November 2018 at 4pm the sale of OnePath to CIGNA New Zealand was finalised. This means that CIGNA is now the new owner of OnePath.

Congratulations to CIGNA, Gail Costa and her team. I expect this was a complex and difficult process. Yet, the work has only just begun, as turning OnePath into an effective adviser unit within the CIGNA business will doubtless involve a lot of work. Nevertheless, as today is Friday, I hope they get to pause and enjoy this significant milestone.


RBNZ spotlights insurance commissions

The RBNZ has included New Zealand Life Insurers in a brief section in its Financial Stability report, as reported on goodreturns. You can read the full report at this link. More worrying than the report content, was the comment by Adrian Orr that the life insurance sector should expect rougher treatment than the banks when the report on conduct comes out in January next year. Worrying, perhaps, but not unexpected, given the conduct issues highlighted in Australia.

That brand decision

As expected AIA, will be called AIA. Goodwill for the "Sovereign" brand is overwhelmed by the benefits of choosing a very large, powerful, global brand for the business. While it may be somewhat sad for those of us who liked the Sovereign brand, it is a logical choice for the business.

Partners Life Announce Product Changes

This week Partners Life announced a number of changes to products saying they are based on adviser feedback, claims experience and competitive positioning. The changes are effective from the 5th of December and here are some of the highlights:

  • New conversion benefit: Allowing up to $500,000 of Trauma cover to be converted to up to double the sum insured of Severe Trauma without underwriting.  
  • New conversion benefit: Standalone Trauma can be converted up to an equal amount of Life and Trauma Accelerated without underwriting
  • New conversion benefit: Life assured under age 30 who buys property, gets married or has a baby can convert some or all of their Terminal Illness cover to Life cover without underwriting.
  • General Enhancement: Dependent child age increased from 18 to 21
  • General Enhancement: Policy Suspension and Premium Holidays have been separated to ensure that the maximum accrued periods of time that can be exercised under each are not accelerated against each other
  • TPD Enhancement: They have removed the restriction which automatically adjusted a life assured’s occupation class to Occ Class 5 and therefore the disability definition after the life assured had been on leave without pay or unemployed for more than 12 months. Now they assess disability based on their usual occupation from which they earned their income most recently prior to the date of disability
  • TPD Enhancement: Partial payment amount has increased to 25% (up to a max of $300,000)
  • Trauma Enhancement: Enhanced definitions of these eight conditions: Alzheimer's Disease, Coma, Stroke, Dementia, Deafness, Intensive Care Treatment, Loss of Limbs, and Major Organ Transplant
  • Trauma Enhancement: Added Diagnosis Benefits to Benign Brain Tumour, Encephalitis, and Systemic Sclerosis
  • Medical Enhancement: Surgical Benefit maximum has increased from $300,000 to $600,000
  • Medical Enhancement: Specialist consultations, Diagnostic procedures, and Follow-up tests have increased from 6 months before/after surgery to 12 months
  • Medical Enhancement: This new benefit is in addition to the current Public Hospital Cash Grant. Under the Public Hospital Credit Benefit we will reimburse 12 months of Private Medical Cover premiums for a Life Assured who receives treatment or undergoes a procedure in a Public Hospital that could otherwise be undertaken privately and funded by their Partners Life Private Medical Cover.
  • Mortgage Repayment Cover and Household Expenses Cover benefits: Due to increased claims for the Redundancy Cover Option under Mortgage Repayment and Household Expenses Cover so soon after policy commencement Partners Life have introduced a 90 day stand down following cover commencement. 

These are some of the changes featured in Partners Life's announcement but more can be found here. 

Here is a little bit about the newly formed product team from Partners Life:


FMA posts warning

The FMA has posted a warning about a financial adviser. You can check out the warning at this link.

Media release
MR No. 2018 – 51
28 November 2018

The Financial Markets Authority (FMA) has issued a public warning about Brian Ferguson, a registered financial adviser from Palmerston North.

Following an investigation, the FMA is satisfied that Mr Ferguson copied and pasted client signatures in insurance policy documents. These policy documents were between third party insurers and clients advised by Mr Ferguson. The FMA is satisfied that Mr Ferguson contravened section 34 of the Financial Advisers Act 2008 because the conduct involved was misleading or deceptive, or likely to mislead or deceive.

In two separate instances, Mr Ferguson either personally carried out or requested a member of the administrative staff to insert a client’s signature on documents by creating a copy of the client’s signature and physically taping it onto the missing signature box.

In one instance, Mr Ferguson had the consent of the client. In the second instance, Mr Ferguson claims it was done with the verbal consent of the client.

The FMA accepts that Mr Ferguson’s conduct was not intended to mislead those purchasing the policies. However, the conduct was likely to mislead the insurer who did not know of the substitution.

Liam Mason, FMA Director of Regulation said, “Mr Ferguson’s misconduct is serious, falling significantly below the care, diligence and skill a reasonable financial adviser would exercise.

This warning is being made public to deter both Mr Ferguson and others in the market from engaging in similar misconduct.”

The misconduct occurred between approximately October 2016 and April 2018, when Mr Ferguson was employed and/or contracted by Preferred NZ Limited. The matter was referred to the FMA by Preferred NZ.


Planning: Power to your New Year

Prepare for your new year by organising yourself to plan. Over the next few weeks I shall post on planning and growth themes. Here are some of the subject areas:

  • What to stop doing
  • What you cannot see - because its right in front of you
  • Mindset and open mindedness
  • Fresh thinking strategies
  • Sources of innovation
  • Investment risk
  • Sources of capital
  • Governance
  • Compliance
  • Risk in your business
  • Planning processes
  • Who to involve, and how
  • You've written lots of plans, but find it hard to work to them

Meanwhile, check out this excellent post from Seth Godin, which nails one of the most common issues in going after new goals. Link.