Cigna: multi-benefit discount campaign details

Cigna has announced a multi-benefit discount campaign for customers over 30. The discounts applies to all new Assurance Extra policies issued on or after 9 September 2020. Depending on a customer’s age and the number of qualifying benefits they choose to take up alongside their Life or Life Income Cover, the discount amount will vary. As a result, policies with multiple people may have different levels of discounts applied. Alternatively, a single policy may only have discounts applied to certain covers.

The discounts available are:

  • 3% for customers aged 30-39 who take out LIFE + one or more other qualifying benefit
  • 5% for customers aged 40+ who take out LIFE + one other qualifying benefit
  • 7% for customers aged 40+ who take out LIFE + two or more other qualifying benefits

To be eligible customers must have a Life Cover in place and have a minimum sum insured amount of $200,000 and have a minimum of one qualifying cover.  Covers selected from the same group will be considered as one qualifying benefit in the discount calculations. Please refer to the table below for more details.

Selection

Benefit Group

Minimum Sum Insured

Covers that qualifies under the benefit group

Mandatory

LIFE

$200,000

Life Cover

Life Income Cover*

Optional

TRAUMA

$100,000

Trauma Cover - accelerated

Trauma Cover - standalone

COMPLETEDISABLE

$200,000

Complete Disablement Cover - accelerated

Complete Disablement Cover - standalone

MONTHLY DISABILITY

$2,000 per month

Income Cover - Agreed Value

Income Cover - Indemnity

Income Cover - Loss of Earnings

Income Cover - Loss of Earnings Ultra

Mortgage Repayment Cover

 


Further clarification of disclosure requirements, and more daily news

MBIE has finalised the disclosure requirements for advisers. Sharon Corbett, manager financial markets has acknowledged that this year hasn’t gone as planned but regulators still want the transition into the new regime to be a seamless one, with the disclosure requirements being designed to be user friendly and informative for clients.

“Regulators have finalised the new disclosure requirements for advisers, and MBIE says they successfully address the “legalistic” disclosure documents that clients have often received in the past by giving advisers flexibility in how and when they can provide certain information.

MBIE’s manager financial markets Sharon Corbett acknowledged that 2020 has not gone as expected, and advisers are busy making sure their clients are adjusting to any financial difficulties - however, she says that government and regulators are also keen to make the transition into the new regime as smooth as possible.

She says the new disclosure structure has also been designed for ease and simplicity, and to enable advisers to offer relevant information to clients at the right time.”

Sharon highlighted that the new requirements is a shift in approach to minimise the production of legalistic disclosures. She continued by saying that advisers will have guidance on what information to provide and when to provide it to clients.

“The new disclosure requirements are really a shift in approach from where everything is prescribed in law, and the problem with that is that it leads to really legalistic disclosures,” she explained.

“If you’re giving each client the same information just with a different box ticked, chances are it’s not going to be overly helpful. Instead, the new regulations are about telling you the kind of information you need to provide, and they give you some points in time where you should provide it. That gives you the flexibility to offer that in a way that makes the most sense for you and your clients.” Click here to read more

In other news:

Cigna: Cigna is currently reviewing applications that may be impacted by tests and examination delays

AIA: COVID-19 has no impact on existing AIA policies

FMA: Consultation - review of 16 class exemption notices expiring in 2021

RBNZ: Reserve Bank welcomes new assistant governor

FMA: FMA issues warning against The Mayhill Agency


Welcome changes to CoFI, and more daily news

The slight amendment to CoFI ensures that financial advisers are omitted from the product providers’ fair conduct programmes. The clarification means that advisers will not have their own code of conduct, their FAP’s systems and the conduct programmes of different product providers imposed onto them. As part of s446M, insurers will have to consider training for advisers, although Katrina Shanks says that this is something that Financial Advice is looking to have amended as the amount of training an adviser is expected to have may limit an adviser’s provider choice.

“There had been concerns that financial advisers would be captured by product providers’ fair conduct programmes, which would have meant they were bound by their own code of conduct, their own financial advice provider’s systems – and potentially multiple product providers’ fair conduct programmes as well.

 

But the bill has been amended during the select committee process to concentrate on the conduct of financial institutions.

 

“We are pleased to see financial advisers have been removed from the duties of the bill which means they do not have to abide by the Fair Conduct Programme as they have their own conduct regime. However, they have been included via s446M in that financial institutions have to consider training and supervision for financial advisers, as intermediaries. This is an area we will be seeking further consideration,” said Financial Advice New Zealand chief executive Katrina Shanks.

 

She said, depending on how much product training an adviser ended up having to take, and what supervision was involved, it could result in advisers offering less provider choice.” Click here to read more

In other news:

FSC: The FSC is reviewing its pandemic and risk management plan in relation to the Generations Conference 

Partners Life: Partners is currently focused on processing Prior Approval claims under Medical Cover

Cigna: Cigna have announced that there are no immediate changes to New Business and Underwriting approaches

RBNZ: Further easing in monetary policy delivered

 

 


Finding the balance between marketing and compliance, and more daily news

With the regulatory changes set to be implemented in early 2021, Karty Mayne from Rosewill Consulting is warning advisers to take precautions with advertising as this is an area that causes issues with compliance. Karty has suggested that advisers pay attention to their online activity. David Greenslade, executive director of Strategi has echoed Karty’s point by saying that although advisers have room to be creative they must carefully review the material.

“Karty Mayne, compliance consultant at Rosewill Consulting says that marketing and adverts are the areas where advisers can often trip up when it comes to compliance, and so they should be taking extra care to review their online activity.

David Greenslade, executive director of Strategi Group says the new disclosure regime will allow advisers to get more “innovative” with how they convey information - but it will also mean that every piece of marketing material will need to be looked at, and potentially revised.”

Karty has suggested advisers can improve current practices by updating their websites and reviewing how social media platforms are used. Additionally, Karty has suggested advisers create a compliance procedure that is simple to follow. Chatswood offers a Digital Advice Strategy service as well as an Advice Process Management service that helps advisers achieve what Karty is suggesting. If you wish to find out more email your interest to Jerusalem.Hibru@chatswood.co.nz or Russell.Hutchinson@chatswood.co.nz

““It’s also a really good opportunity to have a look at modernising your website and how you communicate on social media, because the FMA will look at all of that,” she explained.

Karty Mayne says the easiest way to stay on top of compliance is to create a series of policies, and document their implementation as simply as possible. She noted that if not for COVID-19, we would all be operating within the new regime right now - and so she urges advisers to use this extra breathing space ‘wisely’ and not get left behind.” Click here to read more

In other news

BNZ: Darrin Bull has been appointed as Head of Product and Distribution at BNZ

Cigna: Cigna appoints chief risk officer

Quarters two and three will see clients at their “most demanding”

Climate change may soon render some beach houses uninsurable


Insurers on transgender health cover, and more daily news

The availability of health insurance for transgender individuals was brought forward to the Finance and Expenditure Committee in June 2019 in the form of a petition. Elizabeth Poucher, the driver of the petition, stated that transgender women are unable to get the same level of cover as cisgender women.

“Elizabeth Poucher brought a petition asking for the House to conduct an inquiry into the availability of health insurance for transgender people's care related to transitioning.

She said that transgender people were often unable to get cover for things such as breast cancer, which were affected by hormone treatment, although a male-to-female transgender person was no more at risk than a cisgender woman. Poucher said that while people could sometimes get cover for other pre-existing conditions if they were willing to pay a premium loading, that was not the case for transgender people.”

In response, Roger Styles, Health Funds Association CEO has said that insurers look to offer affordable products and that transgender care was often excluded due to high costs associated with transitioning. For this reason, Styles says that exclusions are not discrimination against the transgender community.

“Health Funds Association chief executive Roger Styles said insurers had to be able to offer an affordable product that was appealing to people to voluntarily purchase.

Transgender care was excluded because of the high cost of the transition process, he said, and the risk of adverse selection. People who thought they might transition would take out cover that would pay for it, loading insurers with extra risk.

He said insurers did not agree with Poucher that this was discrimination.” Click here to read more

In other news

AA Insurance: AA Insurance is a finalist in 2020 Diversity Awards NZ

Southern Cross: Southern Cross celebrated Matariki

RBNZ: RBNZ announced that it will publish data from the Credit Conditions Survey for the June 2020 quarter on Tuesday 14 July. Usually run biannually in March and Sept, the Credit Conditions Survey asks banks qualitative questions about changes in credit conditions in bank lending markets. The RBNZ decided to conduct an interim Credit Conditions Survey for June 2020 to understand how domestic credit conditions have changed post-lockdown.

Cigna: David Haak has joined Cigna.


Cigna non-medical limits enhancements, and more daily news

Cigna’s new non-medical limits for the Assurance Extra and Business Assurance product suites have been introduced. This change is looking to make the underwriting process and getting cover easier for customers.

“As part of these ongoing improvements, I’m pleased to announce that tomorrow – 1 July, we will release new non-medical limits for our Assurance Extra and Business Assurance product suites.

We understand that the process of getting medical tests as part of the application process can be time consuming. These new limits reflect our commitment to looking out for our customers by making it easier to be processed through underwriting and get cover. The new limits will be applied to any new business currently in underwriting with us."

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In other news:

FANZ: Financial Advice is looking to open registrations for the 2020 Financial Advice New Zealand Conference soon

AMP: Business Hub: AMP's Blair Vernon on the death of the office cubicle

FMA: FMA publishes Statement of Intent and Statement of Performance Expectations

FMA: FMA publishes NZX Obligations annual review


Product database updated

The QPR database has been updated and version 136 has been issued to subscribers and all changes are now live on Quotemonster. This version of the database includes the following changes:

Pinnacle Life policy wordings updated:

IP version 16/10/2018

Life version 01/12/2019

Funeral version 23/01/2019

Trauma version 01/12/2019

- no rating changes

 

Cigna business wording 11/05/2020 updated and rating changes applied. Revisions to ratings:

- IP/MP:

Future Insurability + Redundancy max entry/exit ages for Cigna

Pregnancy Premium Waiver Gender for Cigna

Insurable Income - SE rating for Partners Life

Insurable Income Salaried + SE amount score review

- Trauma:

> Diabetes Mellitus Adult definition, min age and amount score for Cigna

> Multiple Sclerosis definition review


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: Senior management restructure for Lifetime Group, and more stories

Lifetime Group have announced that they are making several strategic changes that will see a change in their business focus and senior management team. Peter Cave has said that because Lifetime is looking to focus on the team based in Christchurch, GM of advice Jon O’Connor will be leaving at the end of June. Aaron Bowkett will be leaving his role at Apex to take on Jon’s current role. Sarah Fawcett is set to join Lifetime as the new chief financial officer.

“Managing director Peter Cave said the business had been through significant restructuring over the past 18 months and the next phase of that would see Jon O’Connor leave his role.

Lifetime wanted to focus on the team in Christchurch and centralise the senior management team there to be geared up for the future, he said.

O’Connor is based in Tauranga.

O’Connor said he would finish up in his role on June 30 and he was still deciding what his next step would be. He is to be replaced by Aaron Bowkett, who is currently with Apex Advice.”

Although Lifetime moved from an independent-contractor model to an employee model when Camelot and Lifetime merged, the group has seen a 20% drop in adviser numbers in the last 12 months.

“Peter Cave, managing director, said the strategy adopted after the merger was to pursue an employee model, to best position the group for the new licensing regime.

Lifetime had had an independent-contractor model before that.

“We also implemented our ‘advice for life’ client engagement philosophy during the same period.

“The objective was to position the adviser team for the future and invite those that wanted to come on the journey, to adopt the changes.”

But he said the net result had been the loss of some advisers.

“We have experienced just over 20% reduction in our adviser team over 12 months, made up of those we didn’t offer contracts to; those that left with their clients to set up their own businesses; and those that either retired or left the industry.” Click here to read more

In other news:

Cigna: Treena Jordan joins Cigna as Product Manger, specialising in business products

Why advisers should use handwritten notes, texts and mail


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