Legal and regulatory update for the life and health insurance sector

12 Apr 2021 – RBNZ advised that it is ceasing to publish certain weekly banking customer lending metrics, as it also resumes publishing certain insurance financial statistics. https://www.rbnz.govt.nz/statistics/statistics-news-and-updates

12-13 Apr 2021 - Financial Sector (Climate-related Disclosures and Other Matters) Amendment bill introduced into Parliament, intended to amend the Financial Markets Conduct Act 2013, the Financial Reporting Act 2013, and the Public Audit Act 2001 by implementing a single broad policy to broaden non-financial reporting by requiring and supporting the making of climate-related disclosures by certain FMC reporting entities and supporting related matters. Relevant web links are https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_109905/financial-sector-climate-related-disclosures-and-other and https://www.beehive.govt.nz/release/nz-becomes-first-world-climate-reporting

13 Apr 2021 – FMA provided a breakdown of financial advice providers in the new regime. https://www.fma.govt.nz/news-and-resources/media-releases/breakdown-fa-providers/

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13 Apr 2021 – RBNZ announced the establishment of a new standalone Enforcement Department to promote confidence in compliance across regulated sectors. The Enforcement Department is operationally separate from the Bank’s Supervision team, but the two will work closely together to achieve the Bank’s compliance goals. https://mailchi.mp/rbnz.govt.nz/reserve-bank-launches-new-enforcement-department?e=1769bcd465


March peaks interest in comparison

An all-time record high of 2,504 users on quotemonster.co.nz in the last 28 days confirmed that it was a very, very, busy March. More advisers than ever are interested in comparisons. Advisers tell us that consumers like comparisons. Guidance around replacement advice requires that either a comparison is done, or the risks of proceeding without having done a comparison are explained - for example, in this report. It seems that advisers, regulators, and consumers all agree that comparisons are an essential part of financial advice. This situation is dynamic - you cannot form a view and then keep expecting that to hold true - every quarter, on average, four insurers change the pricing for eight product lines and the policy wordings for five product lines. So if you haven't compared, how can you be confident in your recommendation? 


Legal and regulatory update for the life and health insurance sector

5 Apr 2021 – Following the 15 March 2021 transitional licensing close off date, InvestmentNews NZ issued a media report updating the numbers of transitionally licensed Financial Advice Providers (1,817), Authorised Bodies (1,200) , Financial Advisers (10,750) and Nominated Representatives (12,246). David Chaplin also tells us that search functionality for the FSPR is substantially more limited than the old register. https://investmentnews.co.nz/investment-news/fslaa-by-the-numbers-3000-entities-23000-individuals-1-register/

5 Apr 2021 – InvestmentNews NZ reported on Retirement Commissioner (RC), Jane Wrightson’s, presentation to a parliamentary committee last month, in which the Commissioner stated that the CFFC would unveil a new approach on April 16, targeting financial resilience, better stakeholder co-operation and access to ‘independent’ guidance. https://investmentnews.co.nz/investment-news/covid-prompts-retirement-commission-to-sort-strategy/


Legal and regulatory review for the life and health insurance sector

29 Mar 2021 – IRD released via an e-mail an AEOI update to the CRS Reportable and Participating Jurisdictions showing additions, with New Caledonia added to Reportable Jurisdictions and Albania, New Caledonia, Nigeria, Peru and Turkey added to Participating Jurisdictions.

29 Mar 2021 – Police Financial Intelligence Unit released the February 2021 Suspicious Activity Report. https://www.police.govt.nz/sites/default/files/publications/fiu-monthly-report-feb2021.pdf

29 Mar 2021 - Protected Disclosures (Protection of Whistleblowers) Bill reported back from Select Committee. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_99238/protected-disclosures-protection-of-whistleblowers-bill

Financial Markets Conduct (US Futures Commission Merchants) Exemption Notice 2021. The exemption notice temporarily extends exemptions currently in place for US registered futures commission merchants that are accredited NZX derivatives participants with the notice expiring on 3 December 2021. https://www.fma.govt.nz/compliance/exemptions/current-exemption-notices/financial-markets-conduct-act-exemptions/financial-markets-conduct-us-futures-commission-merchants-exemption-notice-2021/

24 Mar 2021 – RBNZ announced that it had made a number of amendment orders to revise the requirements for banks’ published disclosure statements. https://www.rbnz.govt.nz/regulation-and-supervision/banks/consultations-and-policy-initiatives/completed-policy-development/public-disclosure-of-bank-breaches

25 Mar 2021 – FMA updated and closed the consultation on the content of regulatory returns for licensed DI, MIS managers and DIMS providers, including a “response to submissions” document and release of regulatory returns data templates. https://www.fma.govt.nz/compliance/consultation/consultation-paper-content-of-regulatory-returns-for-licensed-di-mis-managers-and-dims-providers/

29 Mar 2021 - NZX gave notice of amendments to the NZX Derivatives Market Rules (Rules) pursuant to Rule 1.6. The amendments to the Rules were approved by the Financial Markets Authority on 15 February 2021, following consultation with the market in April 2020. These amendments involve updates to bring the Rules in conformance with the 2019 amendments to the NZX Participant Rules. https://www.nzx.com/announcements/369841

29 Mar 2021 – RBNZ advised that it had submitted a response to the Climate Change Commission’s Climate Action for Aotearoa consultation. https://www.rbnz.govt.nz/news/2021/03/reserve-bank-responds-to-call-for-climate-change-consultation


Legal and regulatory update for the life and health sector

24 Mar 2021 – Takeovers Panel released electronic forms for independent adviser applications.

25 Mar 2021 – FMA advised of the release of the International Forum of Independent Audit Regulators (IFIAR) ninth annual survey of Members’ inspection results for the 2020 year. IFIAR is a membership organisation of 54 independent audit regulators, including the Financial Markets Authority (FMA). https://www.fma.govt.nz/news-and-resources/media-releases/ifiar-releases-2020-survey-of-inspection-findings/

23 Mar 2021 – RBNZ released a further update on amended statistics release dates in table form as follows:

Survey

Reference period

Series

Original date

New publication date

NZ debt securities

Jan-21 and Feb-21

D30-D31, D35

16-Mar-21

25-Mar-21

Household balance sheet

Dec-20

C21-C22

5-Mar-21

30-Mar-21

Foreign exchange turnover ($m daily averages)

Jan-21 and Feb-21

B4

15-Feb-2021 and 12-Mar-2021

8-Apr-21

Bank Income Statement

Dec-20

S20-S21

2-Mar-21

14-Apr-21

Bank Financial Strength Dashboard

Dec-20

Key metrics

3-Mar-21

15-Apr-21

Liquidity

Feb-21

L1-L3

1-Apr-21

16-Apr-21

24 Mar 2021 – Parliament completed the third reading for the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Bill. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_98047/taxation-annual-rates-for-2020-21-feasibility-expenditure The Government also announced that it intends to remove interest deductions on residential properties (except for new builds), and will consult on the details of this measure. https://taxpolicy.ird.govt.nz/news/2021/2021-03-23-government-property-announcements


Partners Life announce new commission payment system, and more daily news

Partners Life has announced that they expect to implement a new commission payment system on 29 March. Although the payment system is set to be updated, commission processing and calculations will remain unchanged. The change will affect the format of commission statements. From 29 March, commission statements will be made up of a commission statement, a transaction list, and a buyer-created tax invoice and credit note if advisers are GST registered.

The first section of the statement will include summaries of all daily transactions. This will include credited and debited commission, applicable taxes, and amounts paid to bank accounts. The second section will focus on breaking down commission payments by policy number, client name, annual premium income, and commission type. The third section will highlight the policy number, client name, API of the policy, total commission paid, non-life portion of the commission paid and the GST added or deducted on non-life commission. GST registered advisers will have access to a buyer created tax invoice/credit note. Partners Life has said that it is more practical to calculate the GST on non-life commissions as they have access to the information required to perform the GST calculation.

“Partners Life is implementing a new commission payment system. We expect the new commission payment system to be live on 29 March 2021. Commission processing and calculations will remain the same, the only change you will notice is the improved format of our commission statements.

The new commission statements now contain three separate sections:

  • Commission statement
  • Transaction list
  • Buyer-created tax invoice/credit note (if you are GST registered)

The first section of your commission statement is a summary of all transactions for the day. This will clearly outline the total of each type of commission credited or debited, applicable taxes added or deducted, and total amount paid to your bank account.

In addition to the above, the commission run number will change. Instead of the commission run number increasing by one for every run, the new run number will be the date of the commission payment. For example, the commission run number for Monday 29 March 2021 will be 20210329 (e.g. YEAR/MONTH/DAY).

The second section of your commission statement is the transaction list. This will provide a breakdown for all commission payments by policy number, client name, annual premium income, the type of commission paid per policy and the amount.

The third section of your commission statement is a buyer-created tax invoice/credit note for GST purposes. The buyer created tax invoice/credit note will state the policy number, client name, API of the policy, total commission paid, non-life portion of the commission paid and the GST added/deducted on non-life commission. If you are GST registered, we will provide you with a buyer created tax invoice/credit note. We believe it is more practical for us to calculate the GST on non-life commissions as we have access to all the information required to perform the GST calculation. By receiving the buyer-created tax invoice/credit note, and continuing to sell our products, you agree not to issue a tax invoice for the commission earned and you also agree to inform us if your GST registration status changes.”

In other news

Fidelity Life: Adrian Riminton to be new Chief Risk Officer from 1 April 2021

FMA: James Greig to lead FMA monitoring of new regime


Legal and regulatory review for the life and health insurance sector

19 Mar 2021 – FMA media release advised that James Greig, FMA Director Supervision, will lead monitoring and supervision of financial advice. https://www.fma.govt.nz/news-and-resources/media-releases/james-greig-fma-director-supervision-to-lead-monitoring-and-supervision-of-financial-advice/

19 Mar 2021 – AML/CFT - Department of Internal Affairs release advising that, as of 15 March, Financial Service Providers (FSPs) registering or updating their annual report details on the FSPR are required to declare if they are captured under the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT Act) as a reporting entity and who they are supervised by. The type(s) of financial services registered for as an FSP, and what activities offered in the ordinary course of business will determine if an FSP is a reporting entity. https://www.dia.govt.nz/AML-CFT-New-FSPR-registration-and-reporting-requirement

 18 Mar 2021 – Select Committee submission closing date advised to be 30 Apr 2021 for the Commerce Amendment Bill that underwent first Parliamentary reading on 16 March. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_108304/commerce-amendment-bill


Cigna Live announced, and more daily news

Cigna has announced that Cigna Live, a live streamed adviser update, will be broadcasted on 8 April 2021. In the live stream Cigna will discuss how the recent technology and product enhancements are intended to help transform adviser advice journeys. Cigna Live will be hosted by Jehan Casinader, Broadcast Reporter of the Year 2020. Gail Costa, senior Cigna staff and other experts will join to discuss recent enhancements and Cigna’s commitment and global positioning. The live stream will be 8 April from 10am to 11am. Those that register go into the draw to win a $1,000 business development pack. Cigna has also announced that it is planning on launching a new initiative that has been described as a market-first. Click here to register

I’m excited to formally invite you to Cigna Live – our first ever live streamed Adviser update.

By tuning in on 8 April, you’ll learn more about how our latest technology and product enhancements will help to transform the advice journey for you and your customers and make it even easier to do business with Cigna.

We’re also excited to be launching a market-first initiative that we think will be a game-changer for the Adviser community.

Jehan Casinader, Broadcast Reporter of the Year 2020, will host the event and you’ll hear from myself and key subject matter experts from across the business, who will share more about the work we’ve been doing to improve your experience with Cigna.

Alongside my local team, Jason Sadler - Cigna’s Head of International Markets, will provide an update on the company’s global position and ongoing commitment to protecting New Zealanders in 2021 and beyond.

In other news

Financial Advice: How to link a Financial Adviser to a FAP on the Financial Service Providers Register webinar

Financial Advice: Economic Series webinar set run between 31 March and 21 April

FMA: FMA chief executive resigns


Legal and regulatory review for the life and health insurance sector

16 Mar 2021 - The Financial Markets Authority (FMA) Board announced that Chief Executive Rob Everett had resigned and would leave the organisation towards the end of the year. https://www.fma.govt.nz/news-and-resources/media-releases/fma-board-announces-chief-executive-will-leave-at-end-of-2021/

15 Mar 2021 - The Australian Prudential Regulation Authority (APRA) released a response letter for insurers on proposals to collect cyber insurance and management liability data in the National Claims and Policies Database. https://www.apra.gov.au/news-and-publications/apra-releases-draft-reporting-standards-for-data-collection-national-claims

11 Mar 2021 - The Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Amendment Notice 2021 (‘Amendment Notice’) was released on 11 March 2021 and is now in force. It amends Part 5 (Reporting Entities whose customers are licensed managing intermediaries) and Part 8 (Financial advisers arranging for relevant services to be provided for retirement schemes) of the Schedule to the Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Notice 2018 (‘Principal Notice’), with the changes largely arising under the new financial advice regime.


Fidelity Life announce customer research, and more daily news

Fidelity Life has announced that it will be conducting customer research on new products and potential service improvements through Qualtrics. The research is intended to understand what is working and what isn’t. Fidelity Life has revealed that new advisers have already been involved in the research. More advisers will be utilised in future research.

“We’ll shortly be kicking off some research with customers about new product ideas and service improvements with the aim of finding out what they like, so we can do more of it, and what they don’t like, so we can make improvements. Don’t worry, we won’t be bombarding them!

As valued distribution partners, we’re keen to involve you along the way. The insights will not only support how we shape our products to better meet the needs of the market but will also provide us with valuable data on their preferences when it comes to customer experience.

From time to time we’ll share a summary of the findings with you, and hope you’ll find them valuable in supporting your interactions with customers and improve their overall experience with Fidelity Life.

We’ve already experimented in engaging a few advisers in this research so we can enhance your experience and improve the way in which we work with you. We intend to do more of this in the future too, more on that to come.

We’re working with a trusted and established partner in this space and using their survey platform – Qualtrics. If you have any questions, please feel free to get in touch”

In other news

From Stuff: Waiting in Pain: People without money and insurance the ones who suffer - a particularly valuable piece updating us on the situation with waiting lists and the process before that, even to get properly diagnosed. A powerful argument for having a plan and having insurance. 

FMA: March 2021 – A new financial advice regime begins for New Zealand