Southern Cross awarded gold for COVID-19 response, and more daily news

Southern Cross has been awarded gold in Reader’s Digest Quality Service Awards in the health and travel insurance categories for the support offered to members during the pandemic.  This is the fourth consecutive that Southern Cross has be awarded gold in the Reader’s Digest Quality Service Awards health insurance category and second consecutive year that it has been awarded gold in the travel insurance category. Southern Cross has credited it’s focus on supporting members during the pandemic as the main reason for being awarded gold.

“Southern Cross has been recognised for the way it has supported customers during an extraordinary year by winning gold in both the health and travel insurance categories in the Reader’s Digest Quality Service Awards.

The awards are facilitated every year to determine which New Zealand organisations have delivered the most outstanding customer service. Consumers rate organisations on personalisation, understanding, simplicity and satisfaction.

This is the fourth consecutive gold for Southern Cross Health Insurance (SCHI) and the second in a row for Southern Cross Travel Insurance (SCTI). Both organisations come under the Southern Cross brand, and are businesses united by a not-for-profit ethos helping Kiwis look after their health and wellbeing.

Southern Cross maintained this award-winning customer service throughout the pandemic by focusing its efforts on supporting customers in ways that would have the most impact.”

Louise Waterson, Editor-in-Chief of Reader’s Digest, noted that challenges faced in 2020 reflect the importance of focusing on customer service. Waterson said Southern Cross achieved excellent customer service.

“Louise Waterson, Editor-in-Chief of Reader’s Digest, said the challenges of this year have highlighted the importance of delivering excellent service to customers.

“For another year, Southern Cross has achieved such excellence, and continues to raise the benchmark of what outcomes customers of health and travel insurance can expect. Only the highest standards will do when fulfilling the health and travel needs and concerns of their customers and their families. New Zealanders appreciate the skill, professionalism and compassion shown by Southern Cross – all of which makes for a winning business strategy. Congratulations,” she said.”

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FMA provides glimpse into full licence, and more daily news

The FMA has provided some insight into the requirements of the full license. It has been revealed that advisers can begin the application process from 15 March 2021. Although the process will be similar to the transitional license, the questions advisers will be required to answer have been described as being more rigorous. Unlike transitional licenses, full licenses will not have expiration dates. John Botica, director of market engagement, has noted that classes and conditions are another difference between the two license types.

“Advisers will be able to start applying for a full license on March 15, 2021, and the FMA says the process will be similar to what advisers have done for their transitional license – however, it says its questioning will also be a lot more rigorous.

According to FMA director of market engagement John Botica, the key differences between transitional and full licensing will be the time period they cover, and the different classes and conditions attached to a full license. He says the FMA will also go into more depth around an adviser’s practices and procedures.

“Transitional licenses last for up to two years, from March 15, 2021, to March 15, 2023, whereas a full license has no fixed term,” Botica explained.”

An important aspect of the full license is that it will include three different license classes. It will be important that advisers choose the right class as they will need to go through the full license application process again if they need to amend their class selection. Botica noted that advisers with transitional licenses will have two years to apply for their full license while new advisers must apply for full licenses. It has also been revealed that questions around competency, to conduct, to conflicts of interest will be examined during the application process.

““You have that license for as long as you continue to run your business. The full process also includes three different license classes, and it’s important to choose the right class – if you need to change it, you’ll need to go through the application process again.”

“There were two standard conditions for transitional licensing, and for the full license, we add another five,” he continued.

“That was subject to consultation, and we had an overwhelmingly positive response from everyone around standard conditions.”

Botica confirmed that there will be a two year period in which advisers can apply for a full license, and the competency safe harbour will last for those two years. However, new advisers will need to go straight to a full license – they won’t be able to obtain a transitional.

Botica says the questions asked by the FMA will also be much deeper, and will touch on everything from competency, to conduct, to conflicts of interest.” Click here to read more

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nib Group deploy new digital claims process, and more daily news

nib has announced the implementation of Melvin, a machine learning engine, that will process claims that are submitted via the app. The adoption of this engine is intended to reduce manual data entry. Brendan Mills, nib Group CEO, has said that after nib enabled photo submission and claims via the app, user experience improved while information processing time increased. 

“Nib has implemented a new machine learning engine to process claims submitted via its app in less time by reducing the amount of manual data entry required behind the scenes. 

 

Five years ago the health insurer introduced a new feature that let members take a photo of their receipt and submit a claim via the app. 

While that improved the customer experience, it became a challenge to process the information at the backend as the volumes of photos increased, said nib's CIO Brendan Mills.

 

“We created a great customer experience but we then also caused ourselves some pain in processing photos because we're then taking a whole heap of flat images and having to rekey all the data [such as] provider number, customer number…it was quite an intensive process,” Mills told iTnews.

nib has said been trialing systems for the past six months. The engine uses AWS Textract to pick up all relevant information from submitted photos. The engine is set to save 20 seconds in handling time per claim, with half not needing further human intervention. nib is looking at expanding the service to process more claims, improve the service, and improve accuracy. 

“For the past six months, the health insurer has been using machine learning algorithms to strip information from the photos and pass it through to the core claims processing system. 

 

The engine, dubbed Melvin, was developed with data science consultancy Eliiza and uses AWS Textract to read the relevant information from the photos. 

 

Mills said the process saves an average of 20 seconds handling time per claim, and about half of the claims require no further human intervention to rekey or adjust any of the fields from the image. 

 

The insurer is now considering how to expand the service to process more claims, improve accuracy levels and determine if claims can be paid out without any human intervention. 

 

Mills said work is underway to determine the types of claims that have a very “high confidence” level to approve automatically, possibly with a post-processing quality assurance mechanism in place.” Click here to read more

In other news:

nib: adult or child signing up to Easy Health, Ulitimate Health Max, or Ulitimate Healththrough nibAPPLY will give them two month free cover. Offer ends 31 January 2021

FMA: FMA seeks consultation on proposed guidance for advertising

SHARE: SHARE confirms Newpark acquisition


Legal and regulatory update for the life and health insurance sector

17 Nov 2020 – FMA released the FAP final licensing application guide titled, “Guide for providers of Financial Advice Services – an introduction to Full Licence requirements.” https://www.fma.govt.nz/assets/Licensing-guides/Introductory-guide-to-full-licence-requirements.pdf

17 Nov 2020 – RBNZ launched consultation on the details for implementing the final Capital Review decisions relating to banks announced last December, with consultation closing on 31 March 2021. https://www.rbnz.govt.nz/news/2020/11/reserve-bank-launches-consultation-to-implement-capital-review-changes


Legal and regulatory update for the life and health insurance sector

12 Nov 2020 – IRD advised that the Government has announced some changes to the Small Business Cashflow (Loan) Scheme, including extending applications for the loan, which can now be made until 31 December 2023, an extension of 3 years. https://www.ird.govt.nz/updates/news-folder/covid-19-small-business-cashflow-loan-changes

13 Nov 2020 – FMA released its Audit Quality Monitoring Report for 2020. https://www.fma.govt.nz/news-and-resources/media-releases/monitoring-shows-improvement-audits/

15 Nov 2020 – The Government announced the completion of signature of the Regional Comprehensive Economic Partnership Agreement. https://www.beehive.govt.nz/release/new-zealand-signs-regional-comprehensive-economic-partnership

16 Nov 2020 – RBNZ announced the introduction of new series and amendments to its weekly publication of Bank Customer Lending (BCL) metrics.

17 Nov 2020 – FSC advised that the RBNZ will be holding a webinar on Monday 14 December from 10:00-11:30am on insurance in relation to IFRS17 and Solvency.


Get a transitional licence

If you already have a transitional licence or a signed contract with a company that has one, then this doesn't apply to you. If you haven't signed up - one way or another - It is time to get a transitional licence.

We know that the Financial Markets Authority strongly recommended that financial advice providers apply before Monday 14 December 2020 to ensure that their licence application can be processed before the start of the new financial advice regime on 15 March 2021.

That is now less than a month away.

If you are a financial advice provider and with a limited company and you do no not have an FSP number or have not indicated on the FSPR correctly that you intend to apply for a transitional licence, there can be delays. Do not let those trip you up - get on with it now. 

If you are relying on another financial advice provider to bring you in under their licence (as an FA, or an authorised body) and you have not agreed the terms of your contract then you should view the transitional licence as a small insurance policy. For $500 you protect your right to continue to receive renewals and give advice. If you don't buy it and you are let down or don't like the contract you could lose your whole business - including the right to receive renewals according to some agency agreements - for failure to simply get a transitional licence.

I believe in insurance and that is a low-cost piece of coverage worth having. 

If your financial advice business is just one company, and has an FSP number, the process to apply for a transitional licence may only take about 20 minutes.


FSC release new disclosure guide, and more daily news

The FSC has published a new disclosure guide. The guide is designed to help advisers meet obligations and provides information on what to disclose and what is not necessary to disclose. The FSC has focused on life insurance, investment, mortgage advice. The document examines the different disclosure requirements by using Kowhai Advice and Pohutukawa Advice as examples. The guide provides information on:

  • general requirements
  • publicly available information
  • when the nature and scope of the advice is known
  • when making a recommendation
  • when a complaint is received

Read the FSC Disclosure Guidelines

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Advisers ‘best placed’ to help clients understand life insurance


Legal and regulatory update for the life and health insurance sector

10 Nov 2020 – The Financial Advisers Disciplinary Committee website has again been amended such that the “Next Hearing” has been changed from 19 Nov 2020 to Thursday, 10 Dec 2020 at 9:00 a.m., with no further information provided other than details of the venue. https://fadc.govt.nz/upcoming-hearings/

6 Nov 2020 – The Privacy Commissioner published on the website details relating to the serious threat to public health or safety exception where the collection, use and disclosure of personal information is needed to combat a serious threat to public health or safety, such as Covid-19. https://www.privacy.org.nz/blog/privacy-covid-19-and-the-serious-threat-to-public-health-exception/

9 Nov 2020 – FSC released a new Disclosure Guide for the financial advice community. https://www.fsc.org.nz/site/fsc1/Reports/Financial%20Services%20Council%20-%20%20Disclosure%20Guidelines.pdf