Insurance Industry says policyholder guarantee scheme unnecessary, and other news

David Hargreaves writes about how insurers are universally against development of a policyholder guarantee scheme on interest.co.nz. Most policyholders in focus group expressed some willingness to pay a little more for 'fully guaranteed insurance' so long as increased costs would not increase insurer profits.

The Reserve Bank has been pushed back fairly firmly by the insurance industry on suggestions of developing a policyholder guarantee scheme.

Last year the central bank said it was considering introducing a scheme to pay out claims in the event of an insurance company failing.

The concept would effectively insure policyholders against the risk of their insurer collapsing….

"They felt a scheme should be unnecessary if other regulatory settings were correct; would risk moral hazard; would increase costs for policyholders (in a market that already showed signs of underinsurance); and would be an inefficient way of providing protection," the RBNZ said in its submissions summary.

More daily news:

Cigna NZ launches 'new professionals option'

Reserve Bank's consultation on insurance legislation finds financial information insurers publish is broadly appropriate

2022 Budget raises annual operating funding of FMA

Allianz Global Insurance Report finds premiums jumped by 5.1% in 2021


Fidelity Life promises 24 hour turnaround and more daily news

This morning an adviser who writes a lot of business with Fidelity Life asked me today what I thought of their administration. My answer was to point to Fidelity's new promise, Fidelity Life is promising to issue new standard policies within 24 hours of receiving an application, or they will waive the policy fee for the first 12 months, which clearly outlines their intent to deal with administration effectively. More from Fidelity Life on this below:

Sub24 launches today and will run until 30 June 2022.

Fidelity Life Chief Insurance Officer Kath Johnson says the campaign aims to ensure cover is in place for customers as quickly as possible.

“At Fidelity Life we’re all about giving New Zealanders certainty to live a more rewarding life.

“With Sub24 we’re challenging ourselves to turn around standard applications efficiently so our customers can get on with life knowing they’ve got protection in place for the things that are most important to them.”

The Sub24 promise applies to applications for new policies that can be processed under standard underwriting terms, and where no additional medical or financial information is required.

If Fidelity Life can’t deliver on its promise, the policy fee will be waived for the first 12 months.

Full details about Sub24, including terms and conditions, can be found on Adviser Hub.

 

More daily news:

Seth Godin talks about the value of offering 'half-baked' ideas as the key to stimulating creativity in teams - getting input on something that is not perfect or even fully formed makes it clear you are genuinely seeking creative input (not merely endorsement) which encourages others to take creative risks which enable truly great work.

Join Financial Advice New Zealand as they explore how to get the most out of Xero (worth it, Xero has been a big help to Quotemonster.

Techweek22 kicks of on Monday 16th - review the calendar and see what you want to dip into.

Check out NZsearise maps for a heads up on likely sea level impacts - we're seeing one area regularly flooded that was not in the past near us (little shoal bay) what fascinated me was the impact of geology in combination with rising sea levels in the modelling.


Legal and regulatory update for the life and health insurance sector

17 Nov 2021 – FMA released three new self-assessment tools to help financial advice providers prepare for full licensing. The tools include:

  • Record keeping self-assessment tool
  • Cyber security and BCP self-assessment tool
  • Key outsourcing arrangements self-assessment tool

https://www.fma.govt.nz/news-and-resources/media-releases/financial-advice-providers-full-licensing-tools/

17 Nov 2021 – Under “FMA stories,” FMA released comment on its website on mandatory climate-related disclosures – a new regime for NZ and the FMA. https://www.fma.govt.nz/news-and-resources/fma-stories/mandatory-climate-related-disclosures-a-new-regime/

17 Nov 2021 – FMA consultation webpage updated in relation to the consultation completed on the “Proposed class exemption for restricted schemes from certain disclosure and reporting obligations.” https://www.fma.govt.nz/compliance/consultation/consultation-proposed-class-exemption-for-restricted-schemes-from-certain-disclosure-and-reporting-obligations/

17 Nov 2021 – NZ Treasury published a paper titled “The Wealth Ladder: House Prices and Wealth Inequality in New Zealand.” https://www.treasury.govt.nz/publications/an/an-21-01

17 Nov 2021 – The Incorporated Societies Bill second reading was completed in Parliament. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_109429/incorporated-societies-bill


Legal and regulatory update for the life and health insurance sector

17 Nov 2021 – FMA released three new self-assessment tools to help financial advice providers prepare for full licensing. The tools include:

  • Record keeping self-assessment tool
  • Cyber security and BCP self-assessment tool
  • Key outsourcing arrangements self-assessment tool

https://www.fma.govt.nz/news-and-resources/media-releases/financial-advice-providers-full-licensing-tools/

17 Nov 2021 – Under “FMA stories,” FMA released comment on its website on mandatory climate-related disclosures – a new regime for NZ and the FMA. https://www.fma.govt.nz/news-and-resources/fma-stories/mandatory-climate-related-disclosures-a-new-regime/


Legal and regulatory review for the life and health insurance sector

26 Oct 2021 – RBNZ released a report titled, “Climate Changed 2021 & Beyond”, outlining its Climate Change Strategy, including:

  • Measuring and managing our own operational emissions, including our balance sheet;
  • Working directly with our regulated entities on climate-related risk management, including stress testing and supervisory frameworks; and
  • Leading the Council of Financial Regulators’ climate work streams.

https://www.rbnz.govt.nz/news/2021/10/climate-changed-2021-and-beyond


Legal and regulatory update for the life and health insurance sector - updated

20 Oct 2021 - The Digital Identity Services Trust Framework Bill was read a first time and referred to the Economic Development, Science and Innovation Parliamentary Select Committee with report back due by 19 April 2022.

https://www.beehive.govt.nz/release/govt-helps-protect-new-zealanders-digital-identities

https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_116015/digital-identity-services-trust-framework-bill

20 Oct 2021 – Department of Internal Affairs issued a reminder regarding AML/CFT obligations following release of the “Pandora Papers.” https://www.dia.govt.nz/AML-CFT-Reminder---Pandora-Papers

20 Oct 2021 - The third reading of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill was completed in Parliament.

https://www.beehive.govt.nz/release/nz-passes-world-first-climate-reporting-legislation

https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_109905/financial-sector-climate-related-disclosures-and-other

20 Oct 2021 – FMA media release outlining its expanded role as a result of the passage of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill. https://www.fma.govt.nz/news-and-resources/media-releases/climate-related-disclosure-fma-responsibilities/

Oct 2021 – External Reporting Board released a consultation on climate related disclosures focused on the proposed Governance and Risk Management sections, Aotearoa New Zealand Climate Standard 1: Climate-related Disclosures (NZ CS 1)., with submissions closing on 22 November 2021. The Board is also working on the proposed sections for Strategy, and Metrics and Targets and intend to issue those for consultation in March 2022. https://www.xrb.govt.nz/extended-external-reporting/climate-related-disclosures/consultation-and-engagement/governance-and-risk-management-consultation-document/

20 Oct 2021 – The Financial Professional Services Trading Advice Transparency Bill was introduced to Parliament as a member’s bill, proposing to prevent financial advisers who recommend that a third party take over the management or disposal of a business or its assets from performing such a function themselves. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_116381/financial-professional-services-trading-advice-transparency


Legal and regulatory update for the life and health insurance sector

19 Oct 2021 - Minister of Commerce and Consumer Affairs, Hon David Clark, September 2021 diary released with the following potential financial services sector related meetings noted:

  • 1 Sept 2021 – NZ Fin-Ed Centre, Massey University (Dr Pushpa Wood and David Kneebone)
  • 14 Sept 2021 – Meeting with the Council of Financial Regulators (CoFR) (Adrian Orr (Reserve Bank Governor), Rob Everett (CE Financial Markets Authority), Caralee McLiesh (Secretary of the Treasury), Carolyn Tremain (CE MBIE), Adrienne Meikle (CE ComCom), Liam Mason (General Counsel at the FMA), Hon Grant Robertson)
  • 30 Sept 2021 - Meeting with Simplicity NZ Ltd (Justin Lester, David Kneebone, and Sam Stubbs)

https://www.beehive.govt.nz/sites/default/files/2021-10/Hon%20Dr%20David%20Clark%20Proactive%20Diary%20Release%20September%202021_1.pdf

19 Oct 2021 - The committee stage of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill was completed in Parliament. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_109905/financial-sector-climate-related-disclosures-and-other

20 Oct 2021 - The Financial Markets Authority set 30 September 2022 as the target date by when all transitional financial advice providers should apply for their Class 1 or Class 2 full licences. For Class 3 licence applicants, the target date is 30 June 2022. https://www.fma.govt.nz/news-and-resources/media-releases/fmtarget-dates-for-fap-full-licence-applications/

20 Oct 2021 - The Reserve Bank of New Zealand announced a review and consultation on its policy for branches of overseas banks, with submissions closing on 2 March 2022. https://www.rbnz.govt.nz/news/2021/10/review-of-overseas-bank-branches-underway


Legal and regulatory update for the life and health insurance sector

27 Sept 2021 - Minister of Commerce and Consumer Affairs, Hon David Clark, August 2021 diary released with the following potential financial services sector related meetings noted:

  • 12 Aug 2021 – Financial Markets Authority (Chair of the Financial Markets Authority)
  • 26 Aug 2021 – Financial Markets Authority (Mark Todd (Chair), Rob Everett (CE), Edwin Mitson (Government and Industry Relations))

https://www.beehive.govt.nz/sites/default/files/2021-09/Hon%20Dr%20David%20Clark%20Proactive%20Diary%20Release%20%20August%202021.pdf

28 Sept 2021 - Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill completed second reading in Parliament. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_109905/financial-sector-climate-related-disclosures-and-other

29 Sept 2021 - Digital Identity Services Trust Framework Bill introduced into Parliament, designed to establish a legal framework for the provision of secure and trusted digital identity services for individuals and organisations. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_116015/digital-identity-services-trust-framework-bill

29 Sept 2021 – FMA announced the appointment of its current Head of Enforcement, Karen Chang, as Acting General Counsel until the FMA’s new Chief Executive joins next year. https://www.fma.govt.nz/news-and-resources/media-releases/fma-appoints-karen-chang-as-acting-general-counsel/