Legal and regulatory update for the life and health insurance sector

1 Apr 2021 – MBIE published a discussion document seeking public input into problems and proposed options to address jurisdictional inconsistencies between approved dispute resolution scheme rules, with submissions closing on 6 May 2021. https://www.mbie.govt.nz/have-your-say/review-of-approved-financial-dispute-resolution-scheme-rules/  This review process does not include the option of merging the scheme (along the lines of the Australian approach). The review looks at limits, consistency, and jurisdictional issues that may affect claimants. It is well worth taking a look at the document - advisers that have had claims would be advised to take a look too, your feedback may be especially valuable. 


Quality Product Research: Inflation Adjustment item update for Life Cover

Introduction

Inflation is often overlooked when customers are looking to purchase Life Cover. Although it may not be necessary for short term policies, it is however, a valued feature for long term policies (i.e., those that are in place for 20 years or more). 

Sub-items rating review

Hello

Following up on adviser feedback, we have recently added the optional Inflation Adjustment feature to MAS increasing the accuracy of our rating for Life cover for this insurer.

Please note we currently only show the pricing difference between indexed vs non-indexed (as shown below) and the rating for optional items are excluded from the total rating you will see on your research report.

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Notes

The Inflation Adjustment benefit does not significantly vary among providers. Companies differ in expiry age, with Pinnacle being the only that expires at age 60. ANZ bank seems to be the only provider with a deduction for the sub-item “Excludes when premiums are waived”. A significant difference is whether the benefit is optional or included.    

Why is this important?

The benefit would be of high value for those looking to purchase long term policies. To not have this option would have a great impact in the future as you would understand that the cost of living will only increase as time goes on (and so should our Life cover). 

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding.

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz


Quotemonster and Advicemonster updates - live now

We have updated the quotemonster site, on Thursday, and made the following items live, for more detail see below:

  1. New SOA report content setting options allow you to create more customisations for your SOAs if you are an Advicemonster subscriber. To access these click settings, then SOA Setting, then Report Content Setting
  1. New SOA template for Need analysis recommendation note pad - bring through all your calculations from the recommendation notepad in Advicemonster to quote and to the SOA.
  1. New nib rates applied to the site
  1. FSP input validation for user setting and register form - so it is important that your FSP number matches your name and the entry on the FSPR. A reminder that sharing your login is a breach of our terms and conditions and unusual account activity (like switching user names) will be picked up and we will be contacting account-holders that actively share their logins. 
  1. Improved the health product breakdown table in the research report.
  1. Applied Fidelity level standalone trauma maximum level term rule
  1. Changed Partners Life IP and MP max-age to 57 - as we do not quote reduced commission versions of income protection
  1. Update Web version number to v 3.8.7

Congratulations to Albert, Doreen, and the whole team on a big package of updates. Our special thanks to the advisers sending us issues and suggestions for improvement of the Advicemonster process and the SOAs. 


nib on why customers should consider comprehensive health insurance, and more daily news

nib has prepared a list on why customers should consider comprehensive health insurance. nib lists five reasons why members are better off with comprehensive health insurance. These reasons are:

“Greater choice

Your clients choose who they receive treatment from, and alongside their GP or specialist, they decide where and when. Having access to more options helps reduce uncertainty and enables them to make plans to minimise related disruptions caused in their lives.

Less waiting, less worry

It is not uncommon to spend months waiting in the public health system before receiving treatment. While your client is waiting, their health may deteriorate further, and secondary issues could develop. Access to private healthcare, afforded through health insurance, can significantly reduce waiting times, creating greater peace of mind.

Less time off work, less lost income

Poor health could require needing to take time off work to recover. This could result in lost income for your client, as well as any of their family members who may need to support them. Furthermore, without private health insurance, they may have to cover the cost of private treatment themselves, creating additional financial burden.

Access to leading edge treatments

Health practices and treatments are advancing rapidly. Private health insurance can give your clients access to treatments that they may not have otherwise been able to afford.

Preventative care

Prevention is better than dealing with illness and discomfort. With the nib Proactive Health Option, it’s easier for your clients to stay healthy, and to enjoy life and all the things they have worked hard for. They’ll be covered for screening, such as breast screening, prostate screening, heart screening and mole mapping, allergy testing and vaccinations, gym memberships, weight loss management programmes, quit smoking programmes and routine health checks.” Click here to read more

In other news

Partners Life: Partners Life is asking FAPs to login to the FSPR for the FAP and engage financial advisers by March 31 to ensure Partners Life has the latest list from the FSPR

Financial Advice: Bring in the experts - Economic Series - Part 1 Economist Cameron Bagrie

nib:  nib’s Head of Adviser Distribution, Chris Carnall, provided a brief overview of the Intermediary Agreement


Wealthpoint introduces general insurance service, and more daily news

Wealthpoint has introduced the launch of the standalone General Insurance brokerage. Wealthpoint CEO Simon Manning has said that Wealthpoint General Insurance was formed to support advisers expand general insurance services as well as expanding supplier members with a focus on growing commercial, property and liability business lines. Wealthpoint General Insurance is based on the longstanding relationship with Vero and AMP General as well as new arrangements with Delta and Star Insurance. Manning has said that the dealer group has been considering this for a while as general insurance has always been a significant part of business for members. Creating a standalone brokerage means that Wealthpoint can form a working relationship with larger insurers under the IAG brand. Wealthpoint has partnered with Steadfast to form the new brokerage.

“The dealer group, formed from the former AMP advisers association, launched Wealthpoint General Insurance, a standalone brokerage for its 50 member businesses to transact through.

Wealthpoint chief executive, Simon Manning, said Wealthpoint General Insurance had been formed primarily to support member businesses to expand their general insurance offering to clients.

He said Wealthpoint was keen to expand the range of suppliers members could deal with, particularly for commercial, property and liability business lines.

Successful long-term relationships with AMP General and Vero Insurance were still in place and new supplier arrangements with specialist insurers such as Delta and Star Insurance were introduced for Wealthpoint members in the past year.

But, Manning said Wealthpoint was conscious that access to some of the larger insurers, including those operating under IAG brands, was only possible if structured through a standalone brokerage.

"General insurance has always been a pretty big part of our members' businesses and it's been something we have been thinking about for a long time," Manning said.

"There are a few unknowns about how much it will be used as it is only an option for our businesses who want to expand their GI operations or look to bring in more expertise."

Manning said uptake had been encouraging since they began offering its expanded services at the start of this month and "if we overshoot on our expectations then we will have to look for some more people pretty quickly".

"At the moment we are a small staff and are monitoring things closely but the phones have been ringing, so it's pretty encouraging."

He said while some Wealthpoint member businesses had explored the option of setting up their own brokerages, there were significant barriers such as high setup costs, lack of scale at member level and potential regulatory risks.

He said with that in mind Wealthpoint had joined forces with Auckland-based brokers Steadfast.

"They have been extremely helpful, they are very professional and have arrangements with virtually all of the market so that's helped us form alliances with all of the providers we want to.

"They have given us a really good tech platform as well.

"Now it's up to us working through the list of insurers and working with them to bring them onstream. Getting agreements in place will take time and we are being quite methodical working through that." Click here to read more

In other news

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nib: nib and ACC held a webinar

RBNZ: Reserve Bank responds to call for Climate Change consultation


Partners Life Customer Outcome Matrix update, and more daily news

Partners Life has provided more information on the upcoming Customer Outcome Matrix reporting and commission changes. Current bonus rates will remain in place until 30 September 2021 to ensure advisers have time to prepare and adapt before bonus commission rate changes are implemented on 1 October. Partners Life has noted that this adaption period is sufficient for advisers to understand the Customer Outcome Matrix process. Partners Life has also noted that they are in the process of completing changes to ensure regular reporting on Customer Outcome Matrix results.

“We have always maintained that we have wanted to provide at least 3 months visibility to the COM reporting prior any Bonus Commission changes coming into effect, allowing you sufficient time to review your own reporting and to be able to understand the feedback and how this relates to your engagement and servicing of clients.

We have continued to make good progress and are nearing the completion of the implementation project.

Given the material changes associated with COM, and with the many other industry changes that are occurring, we have however, made the decision to extend the ‘Go-live’ date for potential bonus rate changes to 1 October 2021.

We are confident that this will not only provide a robust reporting period to allow you to understand and get comfortable with the COM data but will also allow you to continue to encourage your clients to expect and participate in the COM survey process.

We will further underpin your current bonus rates until 30 September 2021 to provide you with an appropriate period of time to understand and adapt to the results of the COM.

We are close to completing the necessary changes to MPL to provide you with regular reporting on your COM results from your MPL dashboard. We envisage this being available towards the end of April.

Full implementation of COM, including the Bonus Commission levels, will now commence on 1 October 2021.”

In other news

Financial Advice NZ: Understanding your Professional Indemnity Insurance requirements webinar

Getting cross over Cancer cover


Partners Life announce new commission payment system, and more daily news

Partners Life has announced that they expect to implement a new commission payment system on 29 March. Although the payment system is set to be updated, commission processing and calculations will remain unchanged. The change will affect the format of commission statements. From 29 March, commission statements will be made up of a commission statement, a transaction list, and a buyer-created tax invoice and credit note if advisers are GST registered.

The first section of the statement will include summaries of all daily transactions. This will include credited and debited commission, applicable taxes, and amounts paid to bank accounts. The second section will focus on breaking down commission payments by policy number, client name, annual premium income, and commission type. The third section will highlight the policy number, client name, API of the policy, total commission paid, non-life portion of the commission paid and the GST added or deducted on non-life commission. GST registered advisers will have access to a buyer created tax invoice/credit note. Partners Life has said that it is more practical to calculate the GST on non-life commissions as they have access to the information required to perform the GST calculation.

“Partners Life is implementing a new commission payment system. We expect the new commission payment system to be live on 29 March 2021. Commission processing and calculations will remain the same, the only change you will notice is the improved format of our commission statements.

The new commission statements now contain three separate sections:

  • Commission statement
  • Transaction list
  • Buyer-created tax invoice/credit note (if you are GST registered)

The first section of your commission statement is a summary of all transactions for the day. This will clearly outline the total of each type of commission credited or debited, applicable taxes added or deducted, and total amount paid to your bank account.

In addition to the above, the commission run number will change. Instead of the commission run number increasing by one for every run, the new run number will be the date of the commission payment. For example, the commission run number for Monday 29 March 2021 will be 20210329 (e.g. YEAR/MONTH/DAY).

The second section of your commission statement is the transaction list. This will provide a breakdown for all commission payments by policy number, client name, annual premium income, the type of commission paid per policy and the amount.

The third section of your commission statement is a buyer-created tax invoice/credit note for GST purposes. The buyer created tax invoice/credit note will state the policy number, client name, API of the policy, total commission paid, non-life portion of the commission paid and the GST added/deducted on non-life commission. If you are GST registered, we will provide you with a buyer created tax invoice/credit note. We believe it is more practical for us to calculate the GST on non-life commissions as we have access to all the information required to perform the GST calculation. By receiving the buyer-created tax invoice/credit note, and continuing to sell our products, you agree not to issue a tax invoice for the commission earned and you also agree to inform us if your GST registration status changes.”

In other news

Fidelity Life: Adrian Riminton to be new Chief Risk Officer from 1 April 2021

FMA: James Greig to lead FMA monitoring of new regime


Quality Product Research: Trauma item analysis for (inbuilt) Child Trauma

Introduction

Childhood trauma is one of the most unfortunate realities that few parents will face in their lifetime. Although modern medicine has decreased the rate of childhood illness, those that are in this position will be relieved to know that most Life and Health insurers include financial assistance in the form of a Child Trauma benefit.

These are the factors in the definition score that currently differentiate between insurers in our rating database.

Sub-items rating review

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You will notice that the sub-item “Requires insured to nominate child” has the highest deduction for this benefit. Asteron is the only provider that we have found to currently include this criterion. The provider requires the insured to complete a medical assessment for each child before they can be covered under this benefit.Notes

The highest variation between insurers is in the coverage age. The optimal coverage age is from new-born to age 21 (few providers offer this).

We have recently added two additional subitems to reflect whether insurers offer Partial and diagnosis benefits. Interestingly many do include these in their policy wording.

Why is this important?

Parents/caregivers will be pleased to find that this benefit is included in their own Trauma Cover, at no additional cost. The future impact of a childhood illness, injury or accident can be very detrimental to a family’s wellbeing and livelihood.

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding. 

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz


Interrupted: FSC Get in Shape Conference rescheduled plus more daily news

The FSC has announced that the Christchurch and Dunedin Get in Shape summits will go ahead on 14 and 15 April 2020. The second half of the summit was interrupted due to changes in COVID-19 alert levels. Similar to the Auckland and Wellington summits, the upcoming summits will include a masterclass session. Click here to register

“The two Get in Shape Advice Summits that were postponed in February due to Covid-19 alert levels have been reorganised on 14 April 2021 in Christchurch and 15 April 2021 in Dunedin.

The sessions, including the 2021 Masterclass are all designed to help and support the community to grow and adapt, following the start of the new FSLAA regime this week.

If you missed out on our Auckland and Wellington events, tickets are still available for both the Christchurch and Dunedin events. Find out more information and register.

Those already registered for the postponed events will have received an email and text with a link to the updated tickets automatically transferred to the new dates.”

In other news

Fidelity Life: new adviser portal set to go live in July

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Insurance People: Katrina Church asks: Should the government be encouraging the public to seek advice?

Sorted: Tom Hartmann writes: This is what good advice looks like


Quality Product Research: Health Insurance - major review process commenced for exclusions item rating

Introduction

Medical insurance is one of the most hotly contested areas of product comparison. Adjustments are made frequently to many features. Exclusions, however, are complex and difficult to compare. Although we update our exclusions ratings with every new product change released it is time to review the method and balance of the scoring of these items. We have therefore started the process of a major review.

Theme of review

The themes of this review are:

  1. A thorough review of all terms
  2. A focus on the relative weighting of the terms
  3. Calling for claims examples of how the terms are applied

Review process

We have alerted advisers and insurers to our plan to do a review and asked for data on the themes above. Changes will be based on our view of all the information sent to us.

We will then publish a model for changes to the guide scores for exclusions sub-items and ask for input on the proposed new model. Further changes may be made at this stage.

We are seeking claims examples for the review. Further changes may be made at this stage.

Timeline for review

March - advise review started

April - review claims information

May - consult on new model for rating

June - implement revised ratings

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding.

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz