After spending the past 18 months reviewing the sale proposal, the Reserve Bank announced that they have approved the sale of AMP Life to Resolution Life. Customers with existing policies with AMP Life will be unaffected by the transaction.

“The Reserve Bank has approved the proposed sale of AMP Life to Resolution Life, in a revised arrangement that is subject to a number of conditions imposed to protect policyholders.

The Reserve Bank has been reviewing the proposed transaction and consulting with the parties involved over the past 18 months to ensure the deal met our requirements, Deputy Governor and General Manager for Financial Stability Geoff Bascand says.”

For the sale to go ahead a Trust was established. This is to ensure objectives are met, industry dynamics are positive and that there is insolvency protection. Additionally, the Trust is set to ensure localisation. Capital and assets will be held in New Zealand and Resolution Life New Zealand (RLNZ) will be established.

“A bespoke trust model has been established that ensures supervisory objectives are better met, future industry dynamics are generally more positive, and there is additional protection in the event of insolvency - one of the key risk considerations that we have been seeking to mitigate,” Mr Bascand says.

The Trust is required to hold capital and assets in New Zealand that help provide long-term security for policyholder benefits or investments, where relevant. The Trust will be under the management and scrutiny of relevant officers in New Zealand, who have appropriate influence and authority in respect of the New Zealand operations, for the purpose of securing equity across all policyholders.

In addition, the model will see the establishment of a new, locally incorporated insurer Resolution Life New Zealand (RLNZ). The RLNZ board will have a majority of New Zealand resident, independent directors. RLNZ will act as Trustee to the Trust and will effectively manage the assets held in the Trust.”

In other news:

Kepa: Four Adviser Resource Centre Services were available to Kepa Members for free July – September

FSC Connect webinar - Customers, complaints and claims - what have we learnt from COVID-19?

FSC webinar: Compliance with Financial Advisers Act between now and March 31 2020

FSC webinar: Preparing contracts with authorised bodies, advisers, contractors and other staff or suppliers

Melanie Purdey shared what she thought advisers should be asking to ensure that they make the right decision in regard to joining a FAP.  Melanie covered culture, controls, communication, capability, and conflict.

Advisers need to consider the culture of the FAP. To ensure that there is synergy between them and the FAP. Melanie suggests advisers look into the FAP’s leadership, integrity and commitment to customers.

“Does this FAP have the leadership and legacy of looking out for clients’ best interests and putting them in priority?

Have they modelled a culture committed to attracting advisers with integrity or have numbers been the main driver for recruitment? Have they demonstrated leadership in dealing with renegade advisers who have committed breaches in the past?”

Click here to read more

In other news:

Asteron Life: Underwriting and New Business teams moved into a regional-based structure

Fidelity Life: Premium increases for some Income Protection and Key Person Cover customers effective 1 August 2020

Fidelity Life: Premium increases for some new level trauma covers, including Trauma Multi effective 1 August 2020. The underlying rates for some personal IP covers will increase for benefit periods to age 65 to age 70.  For new business for level Trauma and IP the to age 65 term will become to age 70. This was first reported incorrectly by Chatswood as a change to ages of eligibility, our apologies for the confusion. 

Fidelity Life: Planned changes or removal for some sales discounts including Key Person Cover

Here you can find the eighteenth message from the FSC about future changes coming to financial advice regulation. 

Given recent market announcements relating to income protection we would like to get your take on the current environment. Click here to have your say.

Newpark has appointed Bernard McCrae as Chair of its board of directors. Congratulations to Bernie and Newpark on his appointment. Melanie Purdey has resigned as CEO. 

Prompted by the recent article on goodreturns I've been challenged to state my view on the value that dealer groups add for the override they are paid. It has been 20 years since I was employed by an insurance company, although in my current business I deal with many. But back when I left Sovereign's employment to launch Quicken.co.nz I had the view shared by many 'inside' insurers that dealer groups offered little value. Over the ensuring ten years my view was changed. Today I have the economist's viewpoint: as most insurance advisers know that the group is paid an override, and many could obtain that themselves (through one of several strategies) they must see value in the groups, otherwise they wouldn't be members. Then, to explore what that is, I just asked a few. Since then - for about the last ten years - I have seen that value demonstrated. The sources vary. From networking and collegiate exchange, adding more training services recently, through to a broad suite of technology services, most of the groups have been adding value in a battery of ways. Whether that can continue to allow that to be funded in the traditional manner will be up to MBIE as they draft the new Conduct of Financial Institutions law. 

The finalists for the ANZIIF New Zealand Insurance Industry Awards have been announced. The awards are being held on the 27th of November at the Cordis Hotel in Auckland. 

The finalists for the 2019 New Zealand Insurance Industry Awards are:

• Life Insurance Company of the Year - Asteron Life and Fidelity Life
• Innovation of the Year - AA Insurance, Cove, Cover-More Travel Insurance, and Initio
• Service Provider to the Insurance Industry - CoreLogic NZ, IVAA Jewellery Claims Management, JB Hi-Fi, Smith & Smith, and Verisk
• Large Broking Company of the Year - Insurance Advisernet New Zealand and Rothbury Insurance Brokers
• Underwriting Agency of the Year - Delta Insurance and Underwriting Agencies New Zealand 
• Direct General Insurance Company of the Year - AA Insurance, FMG, and Tower Insurance
• Professional Services Firm of the Year - Crawford and Company NZ, DLA Piper, Duncan Cotterill, Finity Consulting, RMS, Sedgwick New Zealand, and Wotton + Kearney
• Excellence in Workplace Diversity and Inclusion - DLA Piper, IAG NZ, Suncorp New Zealand, and Zurich New Zealand 

It has been announced that the FMA is consulting on two standard conditions that they are considering to impose for transitional licences. The final date for submission forms will be Friday 26 July at 5 pm. Submissions should be sent to consultation@fma.govt.nz

Click here to read more

There’s a lot of talk around the licensing pathway, and it is getting more complicated than ever for advisers who would prefer to maintain in control of their advice practice.

Advisers will need to prepare their practice in advance of any licence application with all expected policies, processes, and controls in place. While also maintaining a governance system, financial controls and reporting, and ensuring that there are protocols and procedures in place.

We have identified and mapped out:

• At least eight things which will have to be done and in place if you wish to be allowed to continue practicing just as an adviser in the short term
• 15 more things you need to complete before the end of the Transitional Licensing period if you wish to stay in business as an adviser, although not necessarily with your own licence
• And 23 more things you are required to fulfill if you want to be able to successfully apply for your own licence and retain your independence as a business owner by the Transitional Licensing period.

Barry Read, Russell Hutchinson and Tony Vidler have put together a practical webinar in the key decision points and options for New Zealand financial advisers considering their licensing choices.

Through this webinar, you will be presented with neutral arguments. With no promotion of any models or providers. Instead, you will be provided with a genuine strategic approach that gives your adviser business probable options.

During the webinar, we will provide a comprehensive checklist of the various practice management, advice process, and regulatory issues which we expect will be required for full licensing.

The NZ Adviser' Licensing Decision Pathway Webinar

Date:         5 July 2019

Time:        10.30 a.m.

Cost:          $75 (+ GST)

Duration:   1 hour

Click here to register

Newpark has appointed Peter Lycett as General Manger, Performance and Growth. Lycett has been working as an AFA for the past eight years and has previous experience as a litigator.