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Legal and regulatory update for the life and health insurance sector

Insurance Industry says policyholder guarantee scheme unnecessary, and other news

David Hargreaves writes about how insurers are universally against development of a policyholder guarantee scheme on interest.co.nz. Most policyholders in focus group expressed some willingness to pay a little more for 'fully guaranteed insurance' so long as increased costs would not increase insurer profits.

The Reserve Bank has been pushed back fairly firmly by the insurance industry on suggestions of developing a policyholder guarantee scheme.

Last year the central bank said it was considering introducing a scheme to pay out claims in the event of an insurance company failing.

The concept would effectively insure policyholders against the risk of their insurer collapsing….

"They felt a scheme should be unnecessary if other regulatory settings were correct; would risk moral hazard; would increase costs for policyholders (in a market that already showed signs of underinsurance); and would be an inefficient way of providing protection," the RBNZ said in its submissions summary.

More daily news:

Cigna NZ launches 'new professionals option'

Reserve Bank's consultation on insurance legislation finds financial information insurers publish is broadly appropriate

2022 Budget raises annual operating funding of FMA

Allianz Global Insurance Report finds premiums jumped by 5.1% in 2021

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