Legal and regulatory update for the life and health insurance sector

18 Aug 2021 – The Commerce Commission, as the entity responsible for enforcing the Fair Trading Act, posted information on the recently enacted changes and proposed guidance. https://comcom.govt.nz/news-and-media/media-releases/2021/changes-to-the-fair-trading-act

18 Aug 2021 – The FMA advised that it anticipates that what will be considered essential financial services will be narrower than in previous Alert Level 4 scenarios and further information will be provided as soon as possible. https://www.fma.govt.nz/news-and-resources/covid-19/government-announcement-workplaces-that-can-open-at-level-4/

18 Aug 2021 – Financial Services Council posted the results of new research titled ‘Money and You: Generation Rent’ under the heading “Is home ownership an unattainable dream for most young Kiwis?” https://www.fsc.org.nz/bulletin_display/x_blog_code/2154.html


Chatswood and Quality Product Research - working from home

The team are all working from home. Our normal office phone number will be picked up on a redirect to one of the team and messages cleared if we are unable to answer immediately. Your best approach to reaching us during the lockdown is to email, or call our mobile phones. We are happy to help, also, during the first day or two staff may not be quite as quick as we normally are to respond. We appreciate your patience if that's the case. We hope you all have a safe and short lockdown!


Financial Advice NZ awards, and more daily news

The Financial Advice NZ awards entries are open until 17 September 2021. The awards will include five award categories, with a total of 16 awards on offer. The categories include:

“SERVICE TO THE PROFESSION AWARD - The individual who has made an outstanding contribution to the financial services sector, going above and beyond to champion or enhance the profession. - This person does not have to be a member of Financial Advice NZ. - There is an opportunity for one award for this category.

OUTSTANDING ADVISER AWARD - Recognises members who help New Zealanders achieve financial wellbeing through providing an outstanding financial advice service and who exhibit professional excellence. - There is one award per financial advice stream for this category.

RISING STAR AWARD - Recognises the brightest new talent in advice among members in their chosen field of financial advice. - There is one award per financial advice stream for this category.

OUTSTANDING SUPPORT PERSON AWARD - Recognises members who demonstrate exceptional adviser support and ongoing commitment to the financial services sector. - There is one award per financial advice stream for this category.

COMMUNITY SERVICE AWARD - Recognises members who have made a meaningful and positive impact on the lives of people in our communities in respect of financial wellbeing. - There are three awards in this category.

While there are five award categories, there are 16 awards to be handed out over the night with multiple awards for different advice streams. ” Click here to read more

In other news

Cigna: Cigna Live to be held on 20 August at 10am

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

AIA: AIA named as one of Top Insurance Employers 2021 winners

Suncorp: Suncorp's profits take 17% hit

Russell’s piece on Good returns: Adviser opportunities have never been better

Financial Advice: free Money Week webinars

Adviser Voice: TAL enters into share sale agreement to acquire Westpac’s life insurance business alongside an exclusive 20-year strategic alliance - Australia


Vaccination: it's worth it

Two charts show how vaccination is going and why it is so important. This first shows how we are progressing. Unless you have been living under a rock, you probably know this is only just accelerating now. But the main purpose of this post is to include this figure as context, not a conclusion in itself. The second chart shows the case fatality rate, and how fast this is dropping for the countries with high rates of vaccination. 

I've removed a few of the countries in the middle. It's well worth mousing over the chart to explore specific data tracks and points. If you look at the most recent points you see that in high-vaccination countries case fatality rates are now well under 1%. Not all of this is due to vaccination, there have been some advances in treatment too, but most of it is due to vaccination - a fact you can explore yourself by examining the relatively poorer performance of the countries with COVID-19 in the community with low rates of vaccination. Taiwan, for example, was, like us, quite successful at early control measures - although higher than us, their vaccination efforts are still slow when compared to say Canada or the UK, and case fatality rates are high. 

On a personal note I am really looking forward to my first jab on Wednesday. 


Legal regulatory review for the life and health insurance sector

30 June 2021 - MBIE published a paper: International Developments in Sustainability Reporting: https://www.mbie.govt.nz/dmsdocument/15110-international-developments-in-sustainability-reporting-pdf 

5 Aug 2021 – FMA released research on Retail Investor Platforms. https://www.fma.govt.nz/news-and-resources/media-releases/online-platforms-transform-attitudes/


Number of advisers on FSPR decreases, and more daily news

It has been announced that the Companies Office has deregistered advisers that were registered as financial advisers on the FSPR. Although the number has decreased from the initial number recorded in March 2020, it has increased from the figured reported in March 2021. Currently are there 9236 registered financial advisers. Bolen Ng, MBIE national manager of business registries, has said that 458 FSPs were registered under s18(1)(b) of the Financial Service Providers (Registration and Dispute Resolution) Act 2008. 550 letters were sent out to FSPs who weren’t linked to a FAP. Individuals had 20 working days to update their registration. FAPS now have until 15 March 2023 to apply for their full licences. Click here to read more

“As of July 29, there are 9236 financial service providers (FSPs) registered as financial advisers (FAs) on the Financial Service Providers Register (FSPR).

This number is down 80 from March 15, 2020, but up 58 from March 15, 2121.

FSPs on the FSPR:

- FSPs registered as financial advisers on the FSPR as at 15/03/20: 9316

- FSPs registered as financial advisers on the FSPR as at 15/03/21: 9178

- FSPs registered as financial advisers on the FSPR as at 29/07/21: 9236

Ministry of Business, Innovation & Employment national manager of business registries Bolen Ng says the Companies Office has deregistered 458 FSPs under s18(1)(b) of the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

"These are the FSPs that became financial advisers under the new financial advice regime on March 15, but hadn’t linked to a financial advice provider within three months of that date," Ng says.

In June, the Companies Office sent about 550 letters to FSPs who had not linked themselves to a financial service provider (FAP) warning them of imminent deregistration.

FSPs had a 20 working day objection period within which to update their registration.

FAPs now have less than two years to apply for a full licence by the cut off date of March 15, 2023.”

These reductions are not as great as feared by some through the implementation of the new regime. However, it may be too soon to declare that the necessary balance has been struck between raising standards and sustaining access to advice for the greatest number of clients. As the process of gaining a transitional licence did not require passing much of a threshold many advisers that may leave the industry may have entered the new regime with little or no intention of obtaining a full licence. Insurers report levels of new business production have fallen substantially. That suggests that the industry has sustained a serious blow not fully described by these numbers. 

In other news

Financial Advice: KiwiSaver – Contributions are just as important as fees

RBNZ: Reserve Bank considers tighter mortgage lending standards

From Good returns: Income protection: Why taxable losses are not the right advice


Legal and regulatory update for the life and health insurance sector

3 Aug 2021 – APRA released the results and key learnings from its stress testing of on life and general insurers during Covid19 in 2020. https://www.apra.gov.au/news-and-publications/stress-testing-insurers-during-covid-19-results-and-key-learnings

3 Aug 2021 - Finance Minister Grant Robertson and Reserve Bank Governor Adrian Orr announced that they have updated the Memorandum of Understanding (MoU) on macro-prudential policy to further protect the financial system and support the Government’s housing objectives. https://www.beehive.govt.nz/release/finance-minister-and-rbnz-governor-agree-update-mou-macro-prudential-policy

3 Aug 2021 – RBNZ announced that it will soon begin consulting on ways to tighten mortgage lending standards, including:

  • restricting the amount of lending banks can do above an LVR of 80 percent to 10 percent of all new loans, down from 20 percent at present, to come into effect on 1 Oct 2021.
  • implementing Debt-to-Income (DTI) restrictions and/or interest rate floors in an effort to provide further comfort that borrowing is sustainable, to be introduced at a later date.

https://www.rbnz.govt.nz/news/2021/08/reserve-bank-considers-tighter-mortgage-lending-standards