Legal and regulatory update for the life and health insurance industry

11 Oct 2021 – The FMA, while issuing a public censure of a derivatives issuer (FIRMA NZ), advised that it is in the process of conducting an in-depth monitoring review of the Derivatives Issuer industry, following a sector risk assessment last year. The results of the review will be collated for consideration of future industry guidance and/or standard condition review. While the review has been deferred due to COVID-19 Alert Level changes, the FMA expects to conclude the review before the end of 2021. https://www.fma.govt.nz/news-and-resources/media-releases/censures-firma-nz-breaches

11 Oct 2021 – Two Bills introduced into Parliament

  • Data and Statistics Bill - intended to repeal and replace the Statistics Act 1975

https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_116197/data-and-statistics-bill

  • Retail Payment System Bill - introduces a range of measures to promote competition and economic efficiency in the retail payment system

https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_116198/retail-payment-system-bill

11 Oct 2021 – Council of Financial Regulators noted the passing of its tenth birthday with recruitment of its first adviser, having its role recognised in legislation, and completing an updated Memorandum of Understanding between its members. https://www.cofr.govt.nz/news-and-publications/cofr-celebrates-significant-milestones.html


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?


APRA Life insurance industry statistics release and more daily news

The Australian Prudential Regulation Authority (APRA) today released its Quarterly Life Insurance Performance Statistics publication for the June 2021 quarter.

The update provides an industry level view including showing premium growth and profitability by line of product. It clearly shows the serious problem with income protection contracts that has led to substantial changes being imposed by the regulator.

As a guide to the sector in Australian it is excellent. It is also an exemplar of how sector level information could be provided for the benefit of consumers, advisers, and the industry. Link

 

Other daily news: 

FMA Covid-19 Update – Essential Services, AML/CFT Reports and Financial Licensing and more. Link

CDC Study reveals unvaccinated people are 29 times more likely to land in hospital with Covid-19. Read the article here: Unvaccinated people are 29 times more likely to land in the hospital with COVID-19 than those who got the shot, a new CDC study reveals (businessinsider.com.au)

Partners Life Product changes and Benefit Improvements effective 12 July 2021: Download Product Changes and Benefit Improvements effective 12 July 2021

 


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 and regulatory update for the life and health insurance sector

22 July 2021 – FMA released a report on Insurance conduct and culture: Fire and general insurers update. https://www.fma.govt.nz/news-and-resources/reports-and-papers/fire-and-general-insurers-update/

22 July 2021 – The latest FMA update included information on a report released in June titled “Filing of financial statements: review findings and guidance. https://www.fma.govt.nz/assets/Reports/Filing-of-financial-statements-review-findings-and-guidance.pdf

22 July 2021 – The FMA update also included advice that:

  • The FMA will be consulting in the third quarter of 2021 on proposals for exemptions to provide relief for insolvent FMC reporting entities that are in liquidation, receivership or administration from certain financial reporting requirements under the FMC Act to determine whether a class exemption is required.
  • AML/CFT reports for the period 1 July to 2020 to 30 June 2021 are due by 31 August 2021. AML/CFT supervisors have released updated guidance designed to help reporting entities complete their annual AML/CFT report.

https://www.fma.govt.nz/compliance/guidance-library/annual-amlcft-report-user-guide/

  • Updated the AML/CFT content on the FMA website to include information for Financial Advice Providers and Authorised Bodies.

https://www.fma.govt.nz/compliance/amlcft/faqs/#fapaab

  • A reminder of the new AML/CFT regulations that came into effect on 9 July 2021 and the availability of guidance on the new regulations available on the FMA website.

https://www.fma.govt.nz/compliance/guidance-library/amlcft-regulations-update-2021

22 July 2021 – RBNZ announced a consultation on an interim Solvency Standard for insurers, which will determine the minimum amounts of capital that insurers must hold, with submissions closing 1 October 2021. https://www.rbnz.govt.nz/news/2021/07/reserve-bank-consults-on-interim-insurance-solvency-standard

22 July 2021 – APRA released its Private Health Insurance Annual Coverage Survey for 2020. https://www.apra.gov.au/news-and-publications/apra-releases-its-private-health-insurance-annual-coverage-survey-0

22 July 2021 - Retirement Commission released its latest survey into the financial capability of New Zealanders. https://retirement.govt.nz/news/latest-news/latest-financial-capability-study-proves-knowledge-is-power-with-positive-findings-for-maori/

22 July 2021 – In an article titled “England’s NHS data-sharing to third parties”, the Privacy Commission uses this to highlight the privacy issues relating to patient data that may need to be considered with the consolidation of New Zealand’s district health boards into a single agency called Health New Zealand. https://privacy.org.nz/blog/englands-nhs-data-sharing-to-third-parties/

Probably the two most interesting items here are the conduct report on general insurers and the Privacy Commission's interest in medical data sharing. So many of the options for modernising the sector rest on medical data sharing and banking data sharing that these are likely to be areas under continually increasing scrutiny. 


Legal and regulatory update for the life and health insurance sector

6 July 2021 – IRD released a discussion document on proposals that would allow Inland Revenue to regularly collect bulk information about electronic transactions from payment service providers, with submissions closing on 20 Aug 2021. Link

6 July 2021 - The Government announced that it has agreed to establish a consumer data right framework for New Zealand. Link


Life expectancy change over time

It is always worth reconnecting with this great story from time to time: humans have been able to increase life expectancy dramatically in the last 150 years. It is not, of course, a one way proposition. Poor management, disease, bad luck, and war can have an effect - even in modern times: take South Africa as an example. This long-run analysis flatters some recent challenges. The United States, for example, is in a period where due to poor healthcare and high levels of violence life expectancy has stopped growing. New Zealand's life expectancy is great - and yet we could still save hundreds of lives every year if we could just improve our performance in five key areas to the levels that are typical in several other OECD countries. I suppose that is what makes this journey exciting: there is still so much more room for improvement. 


Home ownership rates and the impact on life insurance

Home purchase has been a major driver for bringing new households into comprehensive insurance planning. Fewer, older, homeowners, reduces the numbers in that pathway to cover considerably. Some flow remains, but the people are older, and more likely to have gained some coverage through other pathways. Financial advisers have been more flexible in identifying prospects through other life events such as immigration, starting new employment, and the birth of a child. They have also been more adept at offering insurance to renters. 

Household budgets under pressure from the increased costs of housing have less room for expenditure of all other types. 

Increasing debt levels are usually well correlated with increasing levels of coverage, so this is a broadly positive for insurance, but balanced by the budget issue, which is reducing the share of households with mortgage debt, and increasing the share renting. 

Home ownership rates av in Dec 2020


Wellbeing timeseries explorer

Statistics New Zealand has a fascinating data explorer for wellbeing - you can find it at this link. For those of you interested in the impact of COVID, you're out of luck as the most recent period included in the survey was for 2018. The two prior periods were 2016 and 2014. It is worth a look. Some things are reassuring - others more worrying: such as the metrics for houses being cold in the winter or for loneliness. 


Stats NZ update data collection approach relating to sex and gender

Stats NZ has revealed that after conducting an extensive public consultation there will be a change to the statistical standard relating to how gender, sex and variations of sex characteristics data is collected and reported. The new standard will ensure that definitions and measures are consistent and that they are inclusive of the transgender and intersex population. Stats NZ has also revealed that the collection and reporting approach is based around a human rights approach.

“An updated statistical standard will inform how agencies collect and report information on gender, sex, and variations of sex characteristics, Stats NZ said today. 

The refreshed standard makes definitions and measures consistent, provides guidance for collecting transgender and intersex population data, and is grounded in a human rights approach. 

“It’s important we collect data in an inclusive way, and our process for developing the updated standard reflects this. The refresh has involved extensive public consultation, input from government agencies, international peers, and the support of subject matter experts,’’ Government Statistician and Chief Executive Mark Sowden said.” 

Advisers and insurers also collect sex and gender information. It would be good to see the same standard applied in order to allow data sets to be compared effectively. A graphic from the Statistics NZ guide is shown below to illustrate how to ask the relevant questions. It seems that for the purposes of insurance data collection the approach recommended is to ask sex as assigned at birth and also then to ask gender (as shown in the third part of step three). When underwriting cover, however, identification of intersex variations would appear to be important. Moving these from the health questionnaire to the part of the application where sex and gender questions are asked would help some respondents a great deal. This is illustrated by the additional questions suggested in step three below.  Statistics NZ Guide to collecting gender sex and variations 2021-04-29 143507
 

 
Visit our website to read this news story and the updated standard: