AIA enhance AIA Vitality, and more daily news

AIA has announced the addition of a new benefit to AIA Vitality. Customers will have the chance to earn an Apple Watch when weekly physical targets are reached. This change is intended to motivate customers to increase physical activity. To have the chance to earn the Apple watch customers will need to enter into an interest-free loan agreement to ensure upfront costs are covered. Once customers enter to agreement, AIA contributes to monthly repayments, if physical targets are met, customers will not be required to pay anything. Len Elikhis, chief product and vitality officer, has said that this new addition to AIA Vitality will offers significant value to customers.

“AIA recently launched a new benefit for its AIA Vitality customers, and is giving them the chance to earn an Apple Watch for reaching weekly physical targets – an initiative it says will be a strong motivator for customers to increase their physical activity.

 

To earn their Apple Watch, customers must enter into an interest-free loan agreement to cover the upfront cost. AIA then contributes to the monthly repayments, and if all physical targets are reached, the customer ends up paying $0.

 

Len Elikhis, chief product and vitality officer says the initiative offers “significant value” to the AIA Vitality membership base, which has been growing steadily since its launch.”

 

Elikhis noted that the new initiative is intended to make the Apple Watch Series 6 more accessible as well as encouraging members to achieve goals. 

“The Apple Watch Benefit is another example of the significant value AIA Vitality is providing for our members,” he concluded.

 

“The aim of the benefit is to make it easier for members to access Apple Watch Series 6 to further encourage our members to achieve their physical activity goals.” Click here to read more 

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AMP: AMP Capital insider flies into top job

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Fidelity Life discuss up front commission changes, and more daily news

Fidelity Life chairman Brian Blake noted that the Government missed an opportunity to reduce life insurance policy commissions through CoFI. In a market that is highly competitive, Blake says that a voluntary reduction in upfront commission is unlikely, although Blake said that Fidelity Life is confident that it has adopted changes that meet guidelines. Fidelity Life is set to launch an online adviser product accreditation programme and an adviser quality assurance programme. Similarly, it has developed good customer outcomes principles to ensure compliance.

“Fidelity Life chairman Brian Blake says the government has missed an opportunity to force down commissions on life insurance policies.

Blake says: "The failure to address high upfront commissions in the Financial Markets (Conduct of Institutions) Amendment Bill was a missed opportunity in our view.

"In a highly competitive market like ours, without regulatory intervention it’s unlikely anyone will significantly reduce upfront commission levels and risk losing market share," he says in the company's annual report

He says Fidelity Life is confident it has adopted conduct and culture changes which meet the requirements of the Financial Markets Authority/Reserve Bank of New Zealand conduct and culture review.

The company will shortly be introducing an online adviser product accreditation programme, an adviser quality assurance programme and it has also developed good customer outcomes principles to help ensure Fidelity continues to meet the needs of its customers.

Further enhancements to its adviser proposition will be announced from early 2021, including some digital initiatives resulting from its Project Watson IT development.”

Although total comprehensive income and commission payments decreased, Fidelity Life experienced premium revenue increased. Fidelity Life has noted that it is looking to comply with RBNZ’s guidelines on prioritising capital protection. To comply, Fidelity Life would not be paying dividends this year.

“In the year to June 30, total comprehensive income fell from $20.7 million to $17.9 million. However, profit rose from $11.6 million to $17.0 million.

Insurance premium revenue increased from $275.47 million to $269.49 million and claims paid out rose from $125.7 million to $139.7 million.

However, commission payments fell from $57.37 million to $53.42 million.

The company’s earnings per share increased just over 10% from $8.73 to $9.62.

Fidelity says because the Reserve Bank has clearly advised all insurers that protecting capital should take priority over paying dividends, no dividend would be paid this year.

The Reserve Bank "expects insurers to take steps to protect, if not build, their capital positions to ensure the industry remains in a strong position to support New Zealanders through Covid-19 and this time of economic uncertainty."” Click here to read more

In other news:

FSC: Generations Digital Conference now available on demand

Southern Cross: Southern Cross have moved from Level 1 EY Building to Level 1 Te Kupenga, 155 Fanshawe Street

AMP: AMP receive buyout offer from US investment company

FMA: Consultation: Recognition of Australian adviser qualifications

Southern Cross: Hip replacements add to health insurer's bill


Legal and regulatory update for the life and health sector

28 Oct 2020 – Financial Services Council media release at the time of the AGM advised of a solid year of member growth and increased revenues. https://www.fsc.org.nz/site/fsc1/Media%20Releases/Financial%20Services%20Council%20-%20Annual%20General%20Meeting%20-%20Media%20Release.pdf

30 Oct 2020 – RBNZ signed the ‘IBOR (Inter-bank offer rates) Fallbacks Protocol’ published by the International Swaps and Derivatives Association (ISDA). https://www.rbnz.govt.nz/news/2020/10/rbnz-signs-isdas-ibor-fallbacks-protocol

30 Oct 2020 - The Commerce Commission published a statement of preliminary issues relating to an application from Aon plc seeking clearance to acquire Willis Towers Watson Public Limited Company as part of a global transaction. https://comcom.govt.nz/case-register/case-register-entries/aon-plc-and-willis-towers-watson-public-limited-company

30 Oct 2020 – AMP announced the receipt of an indicative, non-binding, conditional proposal from Ares Management Corporation, a US-based company, to acquire 100 per cent of the shares in AMP Limited by way of scheme of arrangement. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AMP/362281/333930.pdf


 Aon look to acquire Willis Towers Watson, and more daily news

After announcing its acquisition plans in March 2020,  Aon has submitted an application to the Commerce Commission to acquire Willis Towers Watson. Aon is looking to incorporate the five Willis Towers Watson offices across the country into wholly owned subsidiaries.

“New Zealand’s Commerce Commission has received Aon’s clearance application to acquire the entirety of Willis Towers Watson, as part of a global transaction.

The step was revealed by a statement from the commission, which is New Zealand’s competition, consumer and regulatory agency.

In New Zealand, Aon and Willis Towers Watson both offer a range of insurance brokerage services, including for commercial insurance, reinsurance, group health and welfare benefits, and personal and life insurance. Both firms also provide investment consulting services to institutional investors.

Aon has 58 offices across New Zealand, while Willis Towers Watson has five – Auckland, Wellington, Christchurch, Tauranga, and Dunedin.

Under the proposed transaction, Willis Towers Watson will become a wholly owned subsidiary to Aon. According to the Commerce Commission, it gives clearance to a merger application if it is able to successfully prove that that the deal is unlikely to have the effect of substantially lessening competition in a market.” Click here to read more

In other news

AMP KiwiSaver scheme to go passive, and slash fees

Strategi: The new Privacy Act 2020 2pm webinar

RBNZ: Reserve Bank seeks to preserve benefits of cash


Southern Cross offering domestic travel insurance, and more daily news

Southern Cross Travel Insurance has announced that it will be offering customers domestic travel insurance product.

Customers will be offered:

  • Cover for cancellation of your flight and accommodation if you can no longer travel
  • Cover for accommodation and other expenses if your flight is delayed or cancelled
  • Cover for your luggage and other personal belongings if they’re stolen or damaged
  • Cover for excess charges if you have an accident in your rental vehicle
  • Cover for the kids if you’re delayed getting home and need to pay for extra childcare costs
  • Cover for your furry friends at the kennels if you’re delayed getting home

Click here to read more

In other news

Kiwis with advisers end up significantly better off - research

AMP Australia: AMP advisers call for government inquiry over alleged fraud, deception


Financial Advice conference recipient of Government funding, and more daily news

It was announced that MBIE’s $10 million Domestic Events Fund was set up to support events. Financial Advice NZ has been named as one of the 200 recipients.  The funding was granted to Financial Advice NZ for their 2020 Bounce conference.

“The $10 million Government fund was set up to support the events industry despite the disruption of Covid-19.

Financial Advice NZ received funding for its conference this year, which is set up as a series of roadshow events across the country. The events can be attended online or in-person. The association will decide this weekend whether to go ahead with an in-person Auckland event.”

Katrina Shanks has said that the funding is fantastic and would allow them to have certainty.

“Financial Advice NZ chief executive Katrina Shanks said the funding would allow the association to have some certainty as it worked with the events company delivering its conference this year.

“It’s fantastic for them. It’s yet another industry that’s had a huge hit from Covid.” Click here to read more

In other news:

AMP: AMP announced that it is considering selling all, or some, of its assets, various stories, but this one in the AFR is recent

Partners Life: Expressions of interest is now open for the September 2020 New Adviser Training Course

RBNZ: Same objectives, different challenges


Client outraged after life insurance premium doubles, and more daily news

A couple that took out a life insurance policy with AMP over 30 years ago is outraged that their monthly premiums have doubled from $165.90 to $296.50. They were informed of the changes in a notification letter that stated that their policy would be cancelled as a result of a missed payment.

“An elderly Havelock North couple feel "scammed" after their life insurance premiums are set to almost double, despite signing a contract for life more than 30 years ago.

Hilton and Trish Kyle took out a life insurance policy with AMP in November 1988, with a monthly payment of $165.90.

But Hilton, 69, said they received a letter stating failure to pay a missed payment would see their policy cancelled.

The letter also stated that their premiums will increase to $296.50 per month.”

The couple had set up an automatic payment system, and so when receiving the letter, the couple voiced their disapproval. AMP Life’s investigation found that there was an error in the automated mail system.

“"They are taking advantage of us. It makes us feel terrible," he said.

"We've had an automated payment set up with ANZ for the 32 years.

"We were gobsmacked to be treated like this from AMP. These buggers need to be exposed."

An AMP Life spokeswoman apologies for any distress the letter may have caused the Kyle's and said an automated mail system caused the issue.

"We have investigated this issue and it appears to be a mistake driven from an automated letter," she said.”

Regardless of the investigation findings, the couple have until 5 September 2020 to pay to stop the policy cancellation.

“The couple, who have until September 5 to pay their outstanding premium charge before policy cancellation, say they would stay with AMP if the premiums were reverted back to their original monthly totals.”  Click here to read more

In other news

Hybrid model helps online firm fill gap in KiwiSaver

Nib: Episode 4 of the nib to hold webinar series focusing on intelligent underwriting

FSC: Professional Advice Knowledge Hub now available to view information on FSLAA regulation changes, webinars and research and other resources

Financial Advice: Bring in the Experts: Rhiannon McKinnon to discuss the "State of the Investor Nation" report


FSC looking for industry insights for new study, and more daily news

The FSC is seeking participants in a survey that relates to the three-part study Money & You. The survey is working to gather data on the views of those in the professional advice industry on the challenges faced within the industry and how New Zealanders can be better served. The survey is designed to take 12 -15 minutes to complete. The results will be published later in the year. The first part of the study was focused on the feelings and knowledge of money of New Zealanders and the second component of the study worked to understand the relationship New Zealanders have with money.

Click here to participate in the survey

AMP: AMP management overhaul keeps its risks “on the downside”

Kiwibank: Kiwibank claims negative OCR is unnecessary

Fidelity Life: new September Sharecare challenge is to achieve a minimum of 20 Green Days for a chance to win a subscription for a ‘Delight Gift Box’ from I AM Co

Fidelity Life: new September Sharecare challenge to track your sleep for at least two weeks to go into the draw to win a $250 Wallace Cotton voucher


Industry reacts to disclosure regulation draft, and more daily news

The submissions on disclosure regulations have been released by MBIE. Although the response was largely positive, some concerns were raised about the disclosure requirements set to come into place on 15 March 2021.
 
AMP highlighted the risk of repetition without addressing issues currently being undervalued by consumers. To ensure value is added AMP suggested that disclosures need to be simple and brief, something AMP doesn’t believe has been achieved by the current draft.

“AMP said there was a risk that the disclosure would end up being repetitive and not address the issue of long, impenetrable disclosures not currently being valued by consumers.

 

“For benefits to be delivered to New Zealand consumers it is essential for disclosures to be simple, meaningful, very brief and unobtrusive. We do not consider that these aims would be met with the regulations as drafted.”

 

Under the new rules, advisers are required to disclose any commissions or incentives they receive that a reasonable client might think might materially influence their advice.”

While Financial Advice said that a reasonable person wouldn’t have a good grasp of identifying conflicts of interest within the industry and that the regulation could be strengthened by having higher standards in place. Financial Advice highlighted that there are many references to ‘incentives’ so including a definition and reference to ‘disincentives’ would be valuable. 

“But Financial Advice NZ said a reasonable client would not expect to have a good grasp of identifying conflicts of interest in the sector.

 

“The regulation could be strengthened by having a higher standard, such as – ‘any interest of A, P, or any other person connected with the giving of the advice that has the potential to influence the advice given by A’.

 

“There are various references to ‘incentives’. We recommend including in the regulation a definition and reference to ‘disincentives’ as well. For example, a reduction of commission rates for low volumes could escape the disclosure regime. Disincentives is an area that is often overlooked and should be drawn attention to, so FAPs and advisers cannot avoid their disclosure obligations by saying ‘this disincentive is not technically an incentive’.”” 

AIA stated that there should be further clarification on was is “practicable” for advisers to include and highlighted that this would cause significant issues for financial advice providers. Although AIA doesn’t see this as an issue as they are prepared to invest in the appropriate systems to aid advisers. 

“AIA said there should be more detail on when it was considered “practicable” for advisers to include in their disclosure the amount of fees payable by a client connected to the advice recommendation.

 

“This is a significant issue for financial advice providers. For AIA NZ, significant system investments will be required to provide estimates. While AIA NZ anticipates making this investment, we are concerned that other providers may choose not to do so, and instead elect not to provide estimates on the basis that it is not practicable to do so. This is an undesirable outcome for consumers which we consider could be avoided by better articulating the circumstances when providers may elect not to provide estimates.” Click here to read more

In other news

FSC: Generations Conference will no longer take place

Kepa: Kepa Compliance Officer’s Course was held in partnership with Rosewill Consulting  

Fidelity Life: Fidelity Life were announced as finalists in Best ICT Team Culture category in the 2020 CIO Awards

Fidelity Life: new applications are encouraged to be done through e-App

Fidelity Life: options for alteration requests are:

·       emailing signed alteration requests to admin.services@fidelitylife.co.nz

·       email from the individual policy owner’s email address

·       Mailing to Customer Care, Fidelity Life, PO Box 37-275, Parnell, Auckland 1151