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Legal and regulatory update for the life and health insurance sector

30 June 2022 – IRD released its compliance focus on offshore tax transparency, together with guidance to assist tax agents in complying with the international rules. https://www.ird.govt.nz/media-releases/2022/offshore-tax-transparency-compliance-focus

30 June 2022 – XRB release indicating that it is now a month away from releasing the third and final consultation of the suite of Climate-related Disclosure Standards. https://www.xrb.govt.nz/news/pitopito-korero/

30 June 2022 – The latest FMA update highlighted the release of the Financial Markets Conduct (KiwiSaver Confirmation Information) Methodology Notice 2022, which sets out how providers must calculate fees paid by investors, for disclosure in KiwiSaver annual statements. https://www.fma.govt.nz/compliance/guidance-library/financial-markets-conduct-kiwisaver-confirmation-information-methodology-notice-2022/

Revenue survey reveals both encouraging and worrying news

Recently we completed a search for the public disclosure documents of more than 1,000 Financial Advice Providers and did an in-depth analysis of the public disclosure documents. Results were both encouraging and worrying.The survey includes data on:

  • The scope of advice services offered
  • Sources of revenue
  • Revenue sources by advice services offered
  • Product providers advice can be provided on
  • Extent of use of fees
  • Fee types and amounts
  • Hourly rates chargeable

It was worrying some aspects of the disclosures were inadequate, some merely hard to find. It was encouraging to see a wider diversity of revenue sources and charging mechanisms than had been feared, indicating some awareness of the challenges possible in an environment where upfront commission may be under pressure. Highlights of the research will be available to subscribers to our quarterly life and health report, coming to corporate subscribers in the next few days. Full survey results will be available to subscribers to our quarterly remuneration survey.

CoFI passes in Parliament, and other news

The Financial Markets (Conduct of Institutions) Amendment Bill (CoFI), has been passed in Parliament. CoFI aims to ensure that financial institutions and their intermediaries comply with a principle of fair conduct and associated duties and regulations.

Minister of Commerce and Consumer Affairs David Clark, said the passing of the bill “will establish a new financial conduct scheme that ensures financial institutions put customers before profits”

The FMA welcomes the new bill, with Samantha Barrass, Chief Executive saying

“This will enhance the culture of core financial services in New Zealand, with a focus on putting conduct and the fair treatment of customers at the heart of every business. Firms will be held to account by the FMA for the way they sell products and look after their customers. This brings New Zealand into line with comparable countries overseas."

“It is critical that consumers get the financial products and services they need throughout their life and receive fair treatment in all their dealings with financial institutions. Consumers should have trust and confidence that the institutions who sell products and services to them will always do the right thing.”

“While fund managers, derivatives issuers, and advice providers are already subject to FMA licensing, the same supervision and monitoring powers will now apply to banks, insurers and NBDTs,”

More daily news:

Insurance Business recognises business development managers

Curated Risk introduces professional liability programs for smaller FAPs

ANZIIF's Liability Conference to be held 27 July

Financial services sector records higher number of cyberattacks than any other industry group

Survey finds Covid-19 has impacted SME business holders’ wellbeing

Legal and regulatory update for the life and health insurance sector

28 June 2022 - Financial Markets (Conduct of Institutions) Amendment Bill completed third reading in Parliament.





29 June 2022 – RBNZ released a statement outlining that, at a meeting of South Pacific Central Bank Governors on 20 June 2022, the Governors reconfirmed their commitment to supporting the region’s access to cost effective remittances, retention of bank services and improving financial inclusion. https://www.rbnz.govt.nz/hub/news/2022/06/central-banks-committed-to-economic-prosperity-and-wellbeing-in-south-pacific

Database version 14.8 is now live!

It has definitely been a big year for the Quotemonster team! 

We have recently released an updated version of the QPR database to Quotemonster which contains the following updates: 

  • New policy document versions for Accuro, AIA Private Health, ANZ Bank, and AA Health 
  • Research ratings for ASB Private Health are now available 
  • Minor reviews in Income and Mortgage Protection for Offsets, Dependent Leave without Pay, and Partial Disability amount score  
  • Minor reviews in Trauma for Survival Definition, Trauma Buyback, Cardiac Arrest, and Coma 
  • Full re-rates in Trauma for HIV, Benefit Payment, and Loss of Independence 
  • Minor reviews in TPD for Special Events and Benefit Definition over 65 
  • Minor reviews in Medical for Exclusions
  • Full re-rates in Medical for Mental Health, Second Opinion, Grief and Funeral Support, Network or Market Price Limits/UCR, Product Flexibility, and Loyalty Benefits 

Legal and regulatory update for the life and health insurance sector

27 June 2022 – The Financial Advice Code website was updated to include the names of the two new Code Committee members appointed in April 2022, being Karen Coutts and Erin Jurgeleit. https://financialadvicecode.govt.nz/about-the-code/

27 June 2022 – Law Commission published its final report on class actions and litigation funding. https://www.lawcom.govt.nz/media-release/law-commission-publishes-final-report-class-actions-and-litigation-funding

28 June 2022 – FMA released its 2021 NZX obligations annual review. https://www.fma.govt.nz/news-and-resources/media-releases/fma-publishes-nzx-obligations-annual-review-2022/

27 June 2022 – The Financial Advice Code website was updated to include the names of the two new Code Committee members appointed in April 2022, being Karen Coutts and Erin Jurgeleit. https://financialadvicecode.govt.nz/about-the-code/

Hospitals and urgent care facilities under pressure, and other news

Hospitals and urgent care facilities are under pressure, from influenza, Covid-19 and other respiratory illnesses. As of today, there are 383 cases of Covid-19 in hospitals across NZ. Hospitalisation rates for severe acute respiratory infections are exceeding rates for this time of year over the previous seven years. A Waikato DHB staffer spoke to Stuff, under conditions of anonymity, saying hospitals are not coping.

They said the key issues causing stress to the health system were inadequate staffing numbers and underfunding from successive governments.

They also said staff were not immune to Covid and the flu, which was exacerbating the staffing shortages.

Yesterday the government announced expansion of funded access to the flu vaccine, to cover people with specific mental health conditions and/or additions issues as well as children ages 3 – 12. Epidemiologist and University of Otago (Wellington) Professor Michael Baker praises the government’s move to expand free flu vaccine access but is asking ‘why not make it free for everyone?

Workplace flu vaccination programs are one of the most common forms of employee wellbeing assistance. It is often covered by health insurance or is an action that is rewarded by systems such as AIA Vitality. Employers running wellbeing programs for staff report to us that it is one of the best value interventions. Estimates at effectiveness range from 30% to 60% in terms of preventing infection.

More daily news:

Study finds more than 19 million lives saved in first year of rollout of COVID-19 vaccines

Ministers to review whether orange traffic light setting should be changed

US FDA approves Covid-19 vaccinations for children over 6 months old

BNZ gives tips on how relationships can be financially healthy #ItStartsWithAction

ACC updates client payment rates

Economists say NZ recession almost certain, could trigger brain drain

Medical Assurance Society launches new policy document technology

Medical Assurance Society has launched some cool new policy document technology. In summary:

  • They have recently completed our plain language review of policy documents
  • They have gone to an omnibus documents - for example creating a single document for their Professional Life Plan (PLP) where previously they had five documents
  • They are delivered electronically to - and they no longer print physical documents

I have checked out some of the changes and the ones I particularly like are:

Although I am not normally a fan of omnibus documents that contain wordings for every possible benefit, and you have to check your schedule to see which are include and which are not, MAS gets around one of the disadvantages with the internal menu system - so you  can easily jump to the right section for what you are covered for.

The other feature I really like is displaying the meaning for defined terms at the bottom of every page in which it is used.

Congratulations to Phil Belcher and everyone at MAS that was involved in the upgrade.

Example page below:

MAS policy document sample page June 2022


FMA says cyber security must be a priority, publishes info sheet, and other news

The Financial Management Authority (FMA) says cyber security must be a priority for the financial sector. The FMA has published an info sheet to help financial services firms enhance the resilience of their technology and operational systems and meet relevant license obligations.

The Info sheet covers: how to self-evaluate your cyber resilience against the NIST cybersecurity framework functions (identify, protect, detect, respond, recover); understanding the threat landscape and key risks; reviewing your supply chain risk; governance recommendations; training; ensuring incident response and management plans are in place; how to notify any threats; remediation for customers; and post incident reporting.

The FMA reminded the financial industry of two obligations that are part of its licencing regime:

“to have, at all times, adequate and effective systems, policies, processes and controls that are likely to ensure you will meet your market services licensee obligations in an effective manner.”

“IT systems used to deliver the licensed market service must be secure and reliable. Your arrangements ensure they perform efficiently and the associated risks are managed.”

Chartered Accountants Australia New Zealand have also created a hub with info, tools and resources to help SMEs strengthen their cyber resilience and manage a cyber attack.

NZ’s national cybersecurity agency, CERT NZ, says that phishing is the most commonly reported cyber scam in NZ, making up almost 71% of all reports.

Craig Weber, insurance practice leader at Cognizant, writes in Insurance Business Mag that due to increased working from home, the surface vulnerable to cybersecurity threats has increased and that insurers are working at capturing that data and building it into their risk and analytics.

More daily news:

Financial Services Complaints Limited (FSCL), win legal battle to use the title of “ombudsman”

The Adviser Platform (TAP) extends CRM platform to mortgage advisors

NZ government expanding access to flu vaccine and second covid-19 booster doses

Financial Advice Code Committee names new members: Karen Coutts and Erin Jurgeleit

Survey finds several hundred thousand NZ homes cold, damp, expensive to heat

Employees prefer hybrid model of work

Legal and regulatory update for the life and health insurance sector

23 June 2022 – FMA published an information sheet to help financial services firms enhance the resilience of their technology and operational systems, and meet any relevant licence obligations. https://www.fma.govt.nz/news-and-resources/media-releases/cyber-security-priority-financial-sector/

A couple of news articles out of Australia that I thought might interest you relating to industry body changes for life insurance.

June 2022 - Australia’s life insurance industry announces new peak body: https://www.moneymanagement.com.au/news/liferisk/australia%E2%80%99s-life-insurance-industry-announces-new-peak-body

June 2022 - Australia's FSC introduces new mandatory Life Insurance Code of Practice: https://www.moneymanagement.com.au/news/liferisk/fsc-introduces-new-mandatory-life-insurance-code-practice