Legal and Regulatory Update for the Life and Health Insurance Sector

6 Oct 2021 – Law Commission launched a review of the law relating to adult decision-making capacity and published the Terms of Reference that will guide the review. This may have a bearing on how you identify and help clients that may be vulnerable in some way, some disabled clients, as well as those of you that may work with very elderly clients. There will be a public consultation process in 2022 and an intent to report to the Minister of Justice by the end of 2023. https://www.lawcom.govt.nz/media-release/law-commission-review-law-relating-adult-decision-making-capacity

6 Oct 2021 – MBIE announced that Government is seeking feedback on creating a Digital Strategy for New Zealand, with a closing date for feedback of 10 Nov 2021.

https://www.mbie.govt.nz/about/news/government-seeking-public-feedback-on-digital-strategy/

https://www.digital.govt.nz/digital-government/strategy/towards-a-digital-strategy-for-aotearoa/have-your-say/

7 Oct 2021 – The Office of the Privacy Commissioner released a paper setting out the position of the Office on how the Privacy Act regulates bio-metrics. https://privacy.org.nz/publications/guidance-resources/biometrics-and-privacy/


Southern Cross reveals top claims, and more daily news

Southern Cross has revealed that spinal fusions was the most expensive surgical claim in the year to 30 June 2021, with the most expensive claim costing $222,000. Radical neck dissection surgeries were the next most expensive claims. The three most common claims made were for cryotherapy procedures (34,000 claims), excisions of skin lesions (31,000 claims) and minor surgery performed by a GP (26,000 claims). In the year ended 30 June 2021, Southern Cross paid more than three million claims valued at $1.12 billion.

“Surgery for bad backs has topped the list of most expensive surgical claims funded by Southern Cross Health Insurance (Southern Cross) in the year to 30 June 2021, with the highest individual claim coming to $222,000.

Eight of the top 10 most expensive claims paid by New Zealand’s leading health insurer were for spinal fusions - surgery which permanently connects two or more vertebrae in the spine – with four claims topping a whopping $200,000.

Southern Cross Chief Medical Officer, Stephen Child, said that the expense and volume of these claims demonstrate the value and benefits of health insurance.

“Whether you require expensive surgery such as spinal fusion, or if you are one of thousands needing a more common procedure, such as the removal of a skin lesion, Southern Cross members can have the assurance they are covered for unexpected events.”

The next two most expensive claims were for radical neck dissection surgery, which involves the removal of cancerous tumours, with each claim totalling more than $150,000.

Child said spinal fusion is a highly complex procedure and therefore can be very costly.

“Spinal fusion surgery is a very serious procedure that’s typically performed by an orthopaedic surgeon or a neurosurgeon. Often it involves the implantation of extensive metalware and artificial bone, which results in additional cost and expense.”

Southern Cross is a not-for-profit Friendly Society which operates solely for the benefit of members. For the year ended 30 June 2021, it paid more than three million claims valued at $1.12 billion

When looking at what were the most common claims paid by Southern Cross, the highest by volume was cryotherapy procedures (34,000 individual claims), followed by excisions of skin lesions (31,000) and minor surgery performed by a GP (26,000).

Cryotherapy breaks down skin lesions or skin abnormalities at the site through freezing. A skin excision procedure involves the cutting of abnormal tissue away from healthy tissue.

Colonoscopies, which look for signs of bowel cancer and investigate causes of pain, bleeding or changed bowel habits, were the fourth most commonly-funded procedure, with 23,000 claims paid by Southern Cross.

“Given the high incidence of skin cancer in New Zealand, it isn’t surprising skin lesion removal is one of the most common procedures we fund,” Child said.

Although the individual claim costs can be high, Southern Cross Health Society’s Affiliated Provider programme has helped to dampen rising healthcare costs, achieving more than $220 million of savings for members through the programme since 2012.”

Top 10 most expensive individual claims in FY21

Procedure

Total paid

Spinal Fusion

$222,000

Spinal Fusion

$210,000

Spinal Fusion

$201,000

Spinal Fusion

$200,000

Spinal Fusion

$179,000

Spinal fusion

$175,000

Radical Neck Dissection

$170,000

Radical Neck Dissection

$156,000

Spinal Fusion

$156,000

Spinal Fusion

$153,000

Top 10 procedures by volume in FY21

 

Procedure

Description

Number of procedures funded

Cryotherapy of Skin Lesions

Liquid nitrogen treatment to freeze and destruct an abnormality.

34,000

Excision Skin Lesion

Cutting out abnormal tissue away, usually related to cancer.

31,000

GP minor surgery

N/A

26,000

Colonoscopy

An exam used to detect changes or abnormalities in the large intestine (colon) and rectum.

23,000

Intravitreal injection

An injection or shot of medicine into the eye.

10,000

Nasendoscopy

A test to look at the inside of the nose, the throat (pharynx) and the voice box (larynx).

9,000

Biopsy of Skin and Subcutaneous Tissue

A procedure to remove cells or skin samples from the body for laboratory examination.

9,000

Cataract extraction and insert IOL

Removal of cloudy lens in the eye and replacement with artificial IOL (intraocular) lens.

8,000

Gastroscopy (+/- Biopsy / Polyp)

A procedure to examine the upper part of the digestive system.

7,000

Removal of Teeth

N/A

6,000

In other news

Cigna: Gabe Smith new chief architect

Cigna: David Marquis to become head of data


BBC Series: 100 women masterclass on money

A great episode in the 100 women series focused on Money. You don't have to be a woman to enjoy it and get value from it. Anyone who expects to have women as clients to finds this market important - and I definitely do - may get value from the solid run through many of the basic issues from the perspective of the three experts interviewed:

 


Suicide rates in England and Wales during COVID-19, and more daily news

We hear a lot about how hard covid-19 control measures - especially those that restrict people to just home, or 'lockdowns' - are on mental health. Clearly, for some people, they are catastrophic: someone in a deteriorating relationship with a violent partner would clearly be devastated by a  stay-at-home order. While we have had some interim announcements on the subject here, which were reassuring, we haven't had much data to go on, until now. A recent study on suicide rates in England and Wales during the beginning of the COVID-19 pandemic helps to fill that gap.

The study was based on official death registrations from April to July 2020. It was found that there were fewer suicides than the previous year with 1,603 suicides on record, compared to 1,955 suicides in 2019. The study found the 2020 suicide rates were lower than the 5-year average (2015 to 2019 April to July period)  of 1,835 suicides. The study also revealed that men made up 73.9% of the recorded 1,603 suicide deaths between April and July 2020. The study has credited the lower suicide rate between April and July 2020 to a reduction in suicide during April 2020. That is encouraging news, it means we cannot automatically assume that stay-at-home orders will result in more suicides. On the other hand the UK plainly has a much better track record in dealing with mental health challenges that we have (compare suicide rates per 100,000 of population for evidence). Click here to read more

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In other news

Lifetime: Lifetime Group set to acquire One50 Group

Southern Cross: Talking about dad's health on Father's Day

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


Quality Product Research - Grief & Funeral Support (Part 2)

Following on from our previous blog on the proposed rating of Grief and Funeral in Life cover, we have added a new sub-item to show that Cigna does have a counselling benefit which is only available within three months of a counselling session. 

The total definition score for Cigna remains at 90 however this was an important correction for when we roll our our new detailed head to head reports which will display our sub-items. 

Part 2

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding.

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz

 


Income protection concerns for the self-employed and other daily news

In the UK, where the gig economy is more developed than it is here, policy makers are worried that varieties of social protections designed for full-time employment are not going to work so well in the 2st century labour market. These include pensions (to us, superannuation), holidays, and insurance. Income protection in particular is under the spotlight because, at the same time as self-employment is growing rapidly, it seems that income protection is shrinking rapidly. Income cover has become more and more restrictive for the self-employed as insurers have grappled with long-term claims with hard-to-pin-down signs and symptoms. This sounds familiar. In fact, it sounds like our future if the APRA changes mandated to ensure the sustainability of income protection eventually end up being adopted here. The essence of the problems with income protection for the self employed is a lack of flexibility in the product. That is exactly what insurers are struggling with too. If both want more flexibility it looks like there is room for a new kind of IP product for the self-employed. 

Other daily news

Fidelity Life rolled out August Lockdown mix-tape on Spotify – some fun and simple initiatives for people working from home. Link here: https://www.linkedin.com/posts/fidelity-life-company-ltd_august-lockdown-mix-tape-activity-6836487685444636672-OcWj

Fidelity Life has advertised a new role for Head of Risk and Operational Compliance. More info and the Seek.co.nz link here: https://www.linkedin.com/posts/angelareddy_head-of-risk-operational-compliance-job-activity-6835715862239031296-rVZJ

Asteron Life providing product innovation by listening to customers and advisers. Link here: https://www.linkedin.com/posts/asteron-life-limited_asteron-life-supporters-for-life-activity-6836047658919055361-Y_3g

Stuff published a handy guide to the interaction between ACC, health insurance, and harm if you get an allergic reaction to the vaccine against COVID-19 (a very rare eventuality, but there are some instances of this). Essentially, you are covered by ACC and your personal health insurance is unaffected. Link


Outrage over funeral cover scheme closure, and more daily news

It was announced that New Zealand Credit Union (NZCU) was set to close down its Credicare scheme. This was going to leave over 2,00 people without funeral cover. Members were set to be credited $50. After outrage from members, NZCU announced that the Credicare scheme has been extended until January 2022 when NZCU will decide the future of Credicare. 

“More than 2,000 people are likely to be left with hefty funeral bills as the New Zealand Credit Union (NZCU) looks to close down its Credicare scheme, which provides funeral insurance plans.

Around 2,650 people are part of the scheme, most of them South Islanders. Some of the clients had been paying into the scheme for many years, expecting their families to receive around $10,000 when they died, according to a report by TVNZ’s Fair Go.

In June, NZCU announced that it would shut down Credicare, to the shock and dismay of customers, especially those who had invested significant amounts of money.

As part of the closure, NZCU offered members a credit of $50 in their accounts. However, some customers said they had paid thousands of dollars since the scheme began in early 1990s. The closure will also make it very difficult or costly for elderly customers to obtain further funeral insurance.

Meronea Dawson, a member that had paid into Credicare for more than 20 years, could not help but feel betrayed.

“I feel like a friend of mine shat on me,” Dawson told Fair Go.

Following the backlash, NZCU said it will extend the Credicare scheme until January 2022, when it will make known its decision about the scheme’s future.

“We acknowledge that we could have approached the proposed closure of Credicare in a different way and we are sorry that our recent communication has caused concern and distress for some Credicare members,” said NZCU chief executive Gavin Earle. “We have listened to the feedback and are committed to working together with Credicare members to determine its future.” Click here to read more

Insurers and advisers that regularly work with customers will recognise the misconception represented by the word 'invested': these people believe that they are saving up for a claim. That belief means that they do not understand the product they own - which is a large part of the reason it is not working the way they thought it would. We know that insurance is a low-involvement category. Very often, even if a client has the cover properly explained to them, they forget - because it simply isn't important information for them. Insurance is boring for most consumers, and the new and confusing thing they just been told stands no chance against a long-held belief. That is one of the reasons that we cannot expect clients to maintain their own insurance programmes. It must be done for them, either by the insurer, or a good adviser. 

In other news

Fidelity Life: The Fidelity Life team, including Business Managers can be contacted as usual via phone and email 

Partners Life: Partners Life to monitor the COVID-19 lockdown situation closely over the next few days to work through what this might mean for affordability support options for clients, underwriting and new business pipelines

RBNZ: Official Cash Rate on hold at 0.25 percent

 


Quality Product Research: Proposed rating for Osteoporosis

Introduction

We have recently renamed the “Osteoporosis” item to “Early Onset Osteoporosis” to reflect the severity-based definition that insurers use and a common limit of payment to those aged under 50 years old. 

Sub-items rating review

Osteon new

Notes

A noticeable difference is the fact that several insurers do not offer this benefit once the insured is over 50. Though osteoporosis among those younger than 50 is considered rare, a study conducted at the University of Arkansas found that it's a greater risk than most women realize. From information on 164 college-aged women, 2 percent had bone densities low enough to be considered osteoporosis, and 15 percent were low enough to be in the osteoporosis risk range. To read more on this click here. Nevertheless our previous penalty for the limitation on age was far below the level of cases that this probably removes from the claims pool. So we have increase the penalty from -10 to -75. 

This is also a great example of how our methodology, specifically the  “Amount Score” (one of four) comes into play, to highlight the different payment amounts made by insurers. Please note, Asteron Life only offers cover for Osteoporosis with their “Early Trauma Benefit” similarly with AMP products you will need to select the Plus Options. These are all available in your “Product Settings” on Quotemonster.

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email any claims information you have regarding this condition.   

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz


What if only 17% of people ever went to the doctor?

That would be ridiculous wouldn't it - if only 17% of people went to the doctor when sick. Imagine, most people thinking that going to a doctor was unnecessary. It would be like thinking that a doctor couldn't  really know that much more about how to be healthy, or at least recover from sickness, than you do, so why pay all that money? 

Yet that is what people think about financial advice. It is one of the of the surprising conclusions of this paper from the United States on why people do not seek financial advice. Link

Perhaps you are about to dismiss that as the product of those foolish Americans, known for strange ideas - but the Commission for Financial Capability research shows similar levels of apathy for financial affairs here. Different survey aims and objectives, but very similar results from their survey at this link (especially refer to table three). 

There is no greater enemy to financial well-being than apathy. What we focus on, we can usually find a way to improve. The big debates within the sector tend to be about how to improve. That's valuable and so much earnest energy is expended there. I am part of it and I value the struggle and enjoy it. But I have to keep reminding myself, the really big debate, the one that would make all the difference, is how to get people paying some attention.