Advisers failing to track transitional licence applications, and more daily news

The FMA has revealed that although 400 entities have registered on the FSPR at the companies office to become a FAP, none have initiated the next steps in the process.  During an FSC webinar, John Botica mentioned that an adviser who had received a confirmation email from the Companies Office had mistaken it as receiving his transitional licence. John Botica has urged advisers and groups to follow the application process and assess where there are closely to avoid consequences in March 2021.

“Financial Markets Authority director of market engagement John Botica said there were about 400 entities that had registered for the FAP service with the FSPR but had not yet gone on to the next step.

He told an FSC webinar that he spoke to one adviser who thought that his transitional licence had been granted but he had only received notice that his registration with the Companies Office had been successful.

He said those 400 entities should check back through their processes to see where they were at.

Otherwise they could be in for a nasty surprise next March, he said. “I don’t think you’re going to like the experience if we are rapping on your door [for] operating without a licence.” Click here to read more

In other news:

FSC: Dr Siouxsie Wiles, Microbiologist & Associate Professor MNZM has been announced as the closing keynote for Day 1 of Generations Conference

AIA: AIA has been nominated as Insurance Employer of the Year at the Women in Insurance NZ Awards 2020

Southern Cross: Southern Cross has been nominated as Insurance Employer of the Year in Insurance NZ Awards 2020


AIA set to host online health and wellness event, and more daily news

It was announced that AIA will host an online health and wellness event, AIA Live, on August 2 2020 from 2 pm to 10pm. The event will be focused on mental wellbeing, exercise, activity and rest, nutrition and personal growth while also incorporating music and comedy into the sessions. AIA Life is set to solidify AIA’s commitment to encouraging healthy living. 30 sessions will be running during the event to appeal to people of all ages and in different regions.

“AIA, the largest independent publicly listed pan-Asian life insurance group, today announced plans to host its first ever regional online health and wellness event, spanning 13 markets and headlined by AIA’s Global Ambassador David Beckham.

AIA Live will be broadcast on Sunday 2nd August and will include more than 30 unique sessions, delivering health and wellness content to inspire, motivate and educate people across the region as part of AIA’s commitment to helping them live Healthier, Longer, Better Lives. Key themes will include mental wellbeing, exercise, activity and rest, nutrition, personal growth, as well as light-hearted moments of music and comedy.

AIA Live has been designed to appeal across all age groups and multiple markets, celebrating the cultural diversity of the region while at the same time bringing people closer together to deepen their knowledge of health and wellness in a fun and engaging way.”

Although registration is required, AIA Live will be hosted on AIA’s Healthy Living YouTube channel. This event allows AIA Vitality members to earn points. As part of the event AIA New Zealand ambassadors Ian Jones and Jess Quinn will be hosting activities. Jess Quinn will be running a body image workshop while Ian Jones will be holding a HIIT workout session.

“AIA Live will be hosted on AIA’s Healthy Living YouTube channel and AIA Vitality members will be able to earn AIA Vitality Points for taking part. By registering for the event, participants will also earn the chance to win significant prizes including trips to London to watch Spurs play and meet their first team players, as well as signed footballs from David Beckham, virtual cooking lessons with Jeremy Pang, and merchandise from our other ambassadors. AIA also plans to host similar days in China and India in early September, with tailored content for those markets.

AIA Live will be broadcast in New Zealand on Sunday 2nd August from 2PM-10PM. As part of the event, AIA New Zealand ambassadors Jess Quinn and Ian Jones will be taking part with Jess running a body image workshop and Ian demonstrating an at-home High Intensity Interval Training (HIIT) workout.” Click here to read more

In other news:

Kiwibank: Thousands of Kiwibank customers caught up in privacy breach

Southern Cross: Health screenings 101

AMP: KiwiSaver Still Attractive In ‘retirement’


Southern Cross study reveal unexpected implications of COVID-19, and more daily news

Southern Cross commissioned a study to understand the overall wellbeing of New Zealanders. The health of over 3,000 New Zealanders was examined in the study. The research was conducted during Level 4 and 3 so the implications of COVID-19 on the health of New Zealanders were examined.

“The Southern Cross Healthy Futures Report, conducted in partnership with Colmar Brunton, sought to track the physical, emotional and social health of more than 3,000 New Zealanders. Research began in 2019, but the survey period encompassed the Alert Level 4 and 3 lockdowns, giving insight on how these events affected the nation’s psyche.”

Some of the results of the study have be revealed and have indicated that COVID-19 had a positive impact on the health of participants. When compared to pre-lockdown, the sleep hours of more participants increased, feelings of loneliness decreased, the sense of belonging and connectedness increased, and physical activity increased.

“The research’s preliminary findings, ahead of its full release this month, indicated that the slower pace of life resulted in more people feeling that they were getting enough sleep – from 46% prior to lockdown to 61% during the lockdown. The average hours of sleep increased from 6.97 hours to 7.29 hours, meaning more New Zealanders were able to meet the recommended range of seven to nine hours of sleep.

Despite being isolated physically from friends and family during lockdown, the study found that feelings of loneliness decreased by 8%, as did concerns of being a burden on others – from 41% to 34%. According to the study, Kiwis also experienced a greater sense of belonging and connectedness to their community, up from 44% to 49%.

Physical activity also increased, with 60% of respondents considering themselves physically active, up from 52% before the lockdown.” Click here to read more

That was surprising to me, because it wasn't my experience, but on reflection, and after discussion with others, I can see how that would have been the case for many people. My own experience was a lot more work, less exercise, and less sleep. I get a lot of incidental exercise from going to appointments - so endless zoom meetings knocked a lot of that out. Also, I was one of the people where work got busier, not quieter, as lots of new data needed to be collected, people to be interviewed, policy changes had to be made at insurers, and new planning concepts had to be developed. Having said all that, the experience for others was more likely to be more common - and I shared some of that too - the idea of a shared challenge (COVID-19) and the need to respond. 

In other news:

Partners Life: Naomi on Premium Increases

AIA: 2020 Top Insurance Workplaces revealed


Upcoming changes to independent audit requirements and other daily news

Internal affairs have reported that Cabinet have agreed to introduce an amendment to the current AML/CFT Act on 31 December 2020. All reporting entities will be required to have an independent audit completed every three years instead of every two years.

Cabinet has agreed to introduce a new regulation to extend the default time frame for AML/CFT independent audits from two years to three years. The implementation of these regulations is the responsibility of the Ministry of Justice and until the new regulation comes into force reporting entities must comply with the current obligation to complete an independent audit every two years.”

As a result of the change in regulation, the following expectations have been set in place:

“The Ministry of Justice advises us that they propose to have the new regulation in force by 31 December 2020. This would mean: 

  • Law firms, conveyancers, and new Trust and Company Service Providers are required to have their first independent audit completed by 30 June 2020. i.e. no change to the current timing.
  • Accountants and bookkeepers are required to have their first independent audit completed by 30 September 2020. i.e. no change to the current timing.
  • Real estate agents’ first independent audit would not be due to be completed until 31 December 2021 i.e. the independent audit due date for real estate agents would be extended from 31 December 2020 to 31 December 2021.
  • For any reporting entity that has already completed its first or a subsequent independent audit when the new regulations are implemented, it will have three years from the date of the last independent audit to complete the next one.” Click here to read more Audit Guideline

In other news:

AIA: HealthScreen service has resumed

Privacy Bill: The Privacy Bill third reading was completed in Parliament under urgency in a continuation of the 24 June Parliamentary session, with the Act coming into effect on 1 Dec 2020. The NZ Herald reports the key provisions as:

  • Mandatory notification of harmful privacy breaches
  • Introduction of compliance orders
  • Binding access determinations - If an organisation or business refuses to make personal information available upon request, the Commissioner will have the power to demand release
  • Controls on the disclosure of information overseas
  • New criminal offences
  • Explicit application to businesses whether or not they have a legal or physical presence in New Zealand

Financial Advice NZ: Bring in the Experts: Disclosure Requirements with MBIE webinar

Southern Cross: Southern Cross supports new safe haven for at-risk pets

RBNZ: Reserve Bank welcomes new funding agreement


Partners Life appoints Nadine Tereora, and more daily news

It has been announced that Nadine Tereora will join Partners Life as the new Chief Operating Officer. Nadine is set to join in 2021.

“It is my absolute pleasure to announce that Nadine Tereora is joining Partners Life in the role of Chief Operating Officer. While the details around her start date are still being worked out, we expect Nadine will be starting with us towards the beginning of 2021.

Having worked with Nadine in the past, and more recently having been in direct competition with her in her previous role as Chief Executive Officer at Fidelity, we are beyond delighted to be welcoming Nadine to the Partners Life team, and know that her unique mix of skills, experience and mana will be a huge asset to us as an executive team and to Partners Life as a whole.”

Naomi Ballantyne and Nadine Tereora

In other news:

Financial Advice NZ: Building on the stability of our banking system

Regulatory change needed, or halt to AMP Life sale, policyholder says

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

AIA: Progressive Care Claim Tool


Deeper look into AIA Vitality Business and Community Grant, and more daily news

AIA announced their AIA Vitality Business and Community Grant earlier this month. The grant is set up to support adviser initiative to encourage health and wellbeing.  Advisers are able to find inspiration by referring to a national think tank that New Zealanders will be adding to. “To help inspire you with ideas to help create a healthier community, AIA will be asking New Zealanders to submit their ideas from 29 June.  This will create a national think tank which you can then use to inform your own ideas or to adapt for your submissions.”

There is a process for selecting successful applications, but those most likely to succeed will be increasing engagement within their communities through activities including:

  • “Hosting events to create awareness of health challenges in your community.
  • Investing in digital marketing and promotion of healthy living through podcasts or a video series.
  • Developing marketing activities that will drive the awareness of health and wellbeing in your community.
  • Delivering educational opportunities to increase the importance of health and wellbeing for New Zealanders.”

More details available here

In other news:

CFFC: The Commission for Financial Capability launched new resources to help students gain NCEA credits

RBNZ: The Reserve Bank resuming review of the Insurance (Prudential Supervision) Act 2010

AIA: how MIP works adviser resource


Daily news update: overview of main points from CoFI select committee hearing, and more stories

Insurance and industry associations representatives shared their views on CoFI during the select committee hearing held on 10 June 2020. Participants included, Cigna head of legal Michael Burrowes, AIA general counsel Kristy Redfern, Financial Advice New Zealand CEO Katrina Shanks, Partners Life chief legal, risk and conduct officer Rebecca Sellers, industry expert David Whyte and Anna Black Fidelity Life chief risk officer.

Michael Burrowes head of legal said that the bill was a good idea but was rushed and complex. Michael and AIA general counsel Kristy Redfern both suggested that the bill be delayed. Kristy highlighted that unlike Australia, New Zealand had time to get the bill right. She also warned that the reform was affecting the mental wellbeing of advisers, which could lead to New Zealanders becoming even more underinsured.

“Michael Burrowes, head of legal at Cigna, said the bill was a good idea but there had been a lack of consultation with the industry for what would be a substantial and important regime. The result was rushed, complex and lacked the appropriate clarity and detail.

He and AIA general counsel Kristy Redfern called for the bill to be delayed until FSLAA had bedded in.”

“Redfern said changes to commission rules in Australia had affected the availability of advice and given that New Zealand was underinsured already, that outcome should be avoided. She said the threat of significant reform was affecting advisers’ mental wellbeing. “It’s more important than ever that any additional regulation is fit for purpose and doesn’t create unintended consequences and anxiety.”

She said, because there was no evidence of widespread misbehaviour New Zealand had time to get the bill right.”

Katrina Shanks shared Financial Advice’s concerns as well as saying that it was hard to understand the implications of CoFI as a lot was left to regulations. Katrina also highlighted that that unlike other sectors, the power to prohibit incentives was very strong. Similarly, David Whyte said that it was unclear if advisers were caught by providers’ fair conduct programmes.

“Shanks said Financial Advice NZ had six main concerns: the bill’s power to regulate sales incentives, no definition of “fair”, confusion over whether financial advisers are included in fair conduct programmes, the definition of intermediary, the claims process, and the timing of the bill’s enactment.”

“David Whyte, speaking on behalf of a group of sector participants including Financial Advice New Zealand, the TripleA Advisers Association and Wealthpoint, said the drafting was confusing because it was not clear whether financial advisers were caught by providers’ fair conduct programmes.”

Rebecca Sellers, chief legal, risk and conduct officer at Partners Life highlighted that incentives played an important part in the livelihoods of many advisers. While Anna Black Fidelity Life chief risk officer said that the outcome of CoFI needs to increase customer trust and ensure sustainability

“Partners Life chief legal, risk and conduct officer Rebecca Sellers said incentives played an important part in the livelihoods of many businesses and were a matter of substantive policy that should not be delegated to regulation – though committee member and Labour MP Duncan Webb asked AIA how the rules could be kept up-to-date with a changing industry if they were not in the regulations.”

“Anna Black, chief risk officer at Fidelity Life, said the outcome of the bill needed to increase customer trust and ensure sustainability of the industry over the long term. “Pausing is appropriate.”” Click here to read more

In other news:

Commerce Commission: The Commerce Commission:  announced that it has finalised the criteria it will use to assess whether a lender is “fit and proper” under the Credit Contracts and Consumer Finance Act

Partners Life: Partners Life sponsored the filming for Fight For Time, a story of the Pink Dragons

FSC: FSC 2020 Awards will be held at the FSC Generations Conference Gala Dinner

FSC: Generations Conference earlybird tickets now available

FSC webinar: Introduction to Generations webinar

FSC: FSC’s partner Voices of Hope will be the charity partner for the 2020 Conference


Daily news update: RBNZ recommendations for Appointed Actuaries, and more stories

The Reserve Bank have released their thematic review of an Appointed Actuary role. The review was commissioned to better understand how the role works in practice. The review is presented in the form of a 55-page report that covers the role and scope of responsibility of Appointed Actuaries, regulatory requirements, insurer models, independence, conflicts of interest, expectations in a crisis, actuarial recommendations and advice, and engagement with the board, management, auditors and RBNZ. 

“The review, conducted by the Reserve Bank’s Industry Insights and Thematics team, was launched to better understand how the Appointed Actuary role works in practice for insurers, actuaries and the Reserve Bank, and to identify potential areas for improvement to make the role and regime more effective.

“The review concludes the regime and appointed actuary role are largely effective, but improvements can be made across the board – with the actuaries themselves, insurers and at the Reserve Bank. These improvements are important, and we will be working closely with the industry to support necessary changes,” Deputy Governor and General Manager for Financial Stability Geoff Bascand says.”

RBNZ outlined their expectations as well as identifying several areas that could be improved upon.

Key areas for improvement identified include:

  • Processes for appointments, absences, and reviews to continue with or replace the Appointed Actuary
  • Preparedness for the Appointed Actuary’s involvement in a crisis
  • Identifying and managing conflicts of interest
  • Clarity of delegations
  • Processes for following up recommendations in the Financial Condition Reports
  • Engagement between insurers’ boards and Appointed Actuaries
  • Engagement between the Reserve Bank and Appointed Actuaries
  • Guidance around the Reserve Bank’s expectations of the Appointed Actuary role, including explicit expectations regarding their independence and impartiality

Click here to read full report

In other news:

AIA: AIA Vitality members can donate their weekly AIA Vitality Active Benefit rewards to Trees that Count to plant native trees

RBNZ: Reserve Bank’s Expectations of Insurers and Appointed Actuaries

FSC webinar: 'Money & You - It's not about money, it's about you'


Daily news update: CoFI submitters areas of concern, and more stories

There have been many submissions on the topic of CoFI. AIA, Cigna, Fidelity Life, Partners Life and AMP have shared their views in regard to the implications CoFI will have on advisers, commission as well as the scope of COFI and the time needed.

Fidelity has stated their concern for potential adviser issues and customer confusion relating to advisers having to comply with different fair conduct programmes. Gail Costa, CEO of Cigna, has said that because of CoFI, advisers could end up preferring one provider's conduct programmes to simplify their compliance obligations, causing a conflict of interest. Partners Life have said that advisers should not be caught by the bill at all. While AIA have said that advisers that were not licensed under FSLAA should be the only ones affected by CoFI.

“While submitters voiced support for the overall intention of the bill, all raised concerns about how it has been drafted.

Significant concern related to how advisers will be dealt with under the bill. There is a carve-out for financial advice providers, but not necessarily for individual advisers, in its current form.

That could mean all advisers had to show compliance with the financial advice providers’ conduct programme, as well as meeting their own obligations under FSLAA.”

When discussing commission, Fidelity said that CoFI could create uncertainty and affect participants’ ability to plan for the future. Nick Stanhope has said that change in commission, will create very high levels of regulatory risk.

“Submitters were concerned that the bill left open the option of regulators introducing new rules for commission structures, without any legislation change being required.”

Another area or concern was the scope of CoFI. AMP stated that they were concerned that being considered a financial institution would increase costs. And Partners Life has said that there is a risk that CoFI is going to create an uneven playing field. KiwiSaver customers would have protection through the bill if they were with a bank but not through a fund manager.

“Many submitters were worried about the scope of the new bill. Some said it was too broad – AMP Wealth Management New Zealand said it was concerned about being included as a financial institution – the cost of licensing would affect its ability to keep costs down. The Securities Industry Association said it seemed that NZX trading, and advising market participants, had been inadvertently captured as intermediaries.

But Partners Life said there was a risk it would create an uneven playing field – a customer would have protection through the bill if they were in KiwiSaver through a bank but not through a fund manager.”

The last area that has created mass concern is time. Nick Stanhope has said that FSLAA should be given enough time to be implemented before more regulations are introduced. David Ireland, partner at Dentons Kensington Swan has also expressed his concern saying that CoFI hasn’t gone through the same level of consultation as other significant regulatory changes.

““No consultation draft was released for public feedback, with no opportunity to debate the outcome of the one round of consultation on the issues paper released last year. The outcome is a bill that provides a framework for a new regime, but with many of the details not fully formed and with many uncertainties as to scope and practical application.

“Conduct licensing is complex. A new regime as significant as this one ought not to be rushed through.”” Click here to read more

In other news:

FSC set to host Reserve Bank on CEO Roundtable 11 June 2020

FSC to make oral submission to the Finance and Expenditure CoFI 10 June 2020

FSC: Big Trends in Tech, Innovations and Investing Webinar to be held 9 June 2020

FSC: Get In Shape Advice Session 2 webinar with Karty Mayne and David Greenslade to be held 12 June 2020

BNZ: OMNIMax and BNZ work together to help BNZ customers get the most out of KiwiSaver


Daily news update: AIA and Southern Cross share claims insights, and more stories.

AIA and Southern Cross have provided insight into their claim volumes during Alert Level 4 and 3. Len Elikhis, chief officer, product and vitality highlighted that there was a drop in claim volumes, although he expects claims to have been deferred and not avoided. 

“AIA chief officer, product and vitality Len Elikhis says that for AIA, the vast majority of claims come from surgical procedures. Although the lockdown period saw a drop-off in claim volumes, he says these are more likely to be deferred rather than avoided, making any significant claims savings unlikely.

With Alert Level 2 offering more room for non-urgent procedures, Elikhis says insurers will start to see those claims numbers coming back up, and customers who put their claims off for the lockdown period will be looking to access elective procedures.”

Similarly, Southern Cross experienced a drop in claims during Level 4, however they paid out over 120,000 claims for consultations urgent care.

“Kerry Boille, chief sales officer at Southern Cross Health Society says that Southern Cross has also seen a reduction in claims since the lockdown, but has nonetheless paid a significant amount in consultations and urgent care. She says the focus has been on communicating clearly and openly with members, and in switching to digital consultations where possible.

“We are continuing to process and pay claims, and while we did see a drop-off, we’ve paid over 120,000 claims since we went into Alert Level 4 and the start of lockdown,” Boille said.Click here to read more

nib tell us that Mercy Ascot is now running providing surgeries on Saturdays to try and clear some of the backlog of treatment required. With responses like that the predictions that the sector will not catch up (and some treatments will simply not be provided) are likely to be proven wrong. 

In other news:

Partners Life: My Underwriting Manager (MUM) now automatically prompts updated COVID-19 related mental health questionnaires.

Partners Life: Underwriting restrictions 2020

nib: Webinar on how to use nibAPPLY to be held 10 June 2020

Fidelity Life: Insurer to move 270 Newmarket staff to CBD: Fidelity Life leases new Fanshawe St block

Coronavirus: Saturday surgeries to clear Northland DHB’s 900-strong backlog

Elective surgery back on and Taranaki GPs as busy as ever in level 2