FMA publishes info sheet for FAPs about compliance with record keeping obligations, and other news

The Financial Markets Authority has published an information sheet for Financial Advice Providers about how they can demonstrate compliance with record keeping obligations.

Under the new financial advice regime Standard Condition 1 for both transitional FAP licences and full FAP licences states: “You must create in a timely manner and maintain adequate records in relation to your financial advice service.”

The information sheet provides an overview of the record keeping obligations and sets out areas for FAPs to consider when reviewing their record keeping practises. It also includes examples to illustrate how FAPs can demonstrate compliance with the requirements.

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Government criticised for allocating funds to ACC to work on NZIIS before MBIE’s analysis of consultation on scheme released, and other news

Jenée Tibshraeny writes in NZ Herald of how the government has been critiqued for pushing through legislation to allow ACC to work towards operationalising the NZISS ahead of the Ministry of Business Innovation and Employment’s (MBIE) analysis of submissions made via the consultation process. MBIE has said a formal decision on whether the government will proceed with the scheme will be made in June or July.

MBIE's acting manager of income insurance policy, Francis van der Krogt, told NZ Herald around 2000 people or organisations either made full submissions or answered a shorter-form survey.

He said officials are analysing the feedback and preparing a summary for Ministers, which will be released "in due course".

Asked why the submissions weren't published before the legislation was passed and funding allocated via the Budget, van der Krogt noted the legislation is a "small and relatively technical piece of legislation" that enables ACC to do work it wouldn't otherwise be able to do under existing legislation.

"The work will help inform final decisions. Any substantive legislation to create a New Zealand Income Insurance scheme would go through a full Parliamentary process," van der Krogt said.

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New Zealand’s protection gap according to Sharron Botica, and other daily news

A recent report suggests New Zealanders are under-insured by hundreds of billions of dollars. Spinoff asks Sharron Botica from AIA New Zealand to explain why it’s so important to make up the shortfall.

“Customer insight work carried out by AIA has told us that people often feel protected against death, illness and other physical circumstances because they feel they can lean on whānau and community to help out. But this isn’t always realistic, and it can be a dangerous mistake that could leave that support network severely and unexpectedly cost-laden.

According to a Financial Services Council NZ report from 2020, 71% of New Zealanders are under-insured when it comes to life insurance.

….. we drastically underestimate how much financial pressure is created when a household loses half of its income.

In 2018, the retirement commissioner Diane Maxwell said the New Zealand “she’ll be right” attitude could be playing a part. That attitude has major consequences and leaves your loved ones to carry a heavy burden.

While relying on savings is a common plan in case of a significant event causing a loss of income – the proverbial “rainy day fund” – you need to have savings to use. Data from Stats NZ showed New Zealanders typically don’t have great savings, with just 0.4% of income being saved over the quarter ending March last year."

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FSC says NZ Income Insurance Scheme needs "more time"

Southern Cross wins Organisational Change & Development award at the NZ HR Awards 2022

Jackie Waddams appointed as General Counsel for AIA New Zealand

FANZ’s 1 June webinar covers key insights, updates and best practice for insurance advisers, register here.

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Long covid research and more daily news

Bloomberg reports on research which finds that Covid may persist in the gut and, by inference, in other organs, for months. This is explored as a source of some of the symptoms of long-Covid, an over-arching term for all symptoms that last beyond the initial infection rather than a single discrete disorder:

In the largest study tracking SARS-CoV-2 RNA in feces and Covid symptoms, scientists at California’s Stanford University found that about half of infected patients shed traces of the virus in their waste in the week after infection and almost 4% patients still emit them seven months later. The researchers also linked coronavirus RNA in feces to gastric upsets, and concluded that SARS-CoV-2 likely directly infects the gastrointestinal tract, where it may hide out.

Partners Life Updates Claims System and more daily news

Partners Life has announced the launch of a new claims management system. The system is designed to improve how case managers support clients through the claims process, creating a better overall experience and enabling better links to treatment options. From the Partners Life release:

Claims management transformation

Like you, we know how important it is to see claims go through smoothly and know clients appreciate hassle-free service with prompt settlements. We always seek ways to improve client satisfaction, so we are shifting our service level up a few gears.

Today, we launch our new claims management system – designed to deliver a more straightforward and efficient ‘incident to outcome’ claims service for clients, and you as advisers.

Initially focused on Risk claims, this comprehensive operating system upgrade represents one of the most significant investments we have made since Partners Life opened its doors eleven years ago.

…With this system, case managers can better guide clients through their claims journey smoothly – and successfully manage their return to work and independence.

Our case managers will have a greater capacity to coordinate services and treatments, supported by better workflow automation.

In addition, the system’s case segmentation matrix helps coordinate claim journeys related to their level of need. This built-in workflow management feature ensures the best possible client outcomes by providing real-time monitoring, facilitating better resource allocation or escalation response.

… This new claims management system guarantees a more consistent approach, improved payment control, quality assurance, and the best client outcomes.

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New Southern Cross CEO appointment, and more daily news

Southern Cross Healthcare has announced that Chris White will take on the role of CEO permanently. He has been operating as the interim CEO since October 2021. White has said that Southern Cross operates in an exciting sector and that the insurer is filled with great people.

“Southern Cross Healthcare has announced that interim CEO Chris White will take up the role permanently, effective immediately.

Since taking on the role of Interim CEO, Chris has led the Healthcare team through one of its most challenging and unprecedented periods in the organisation’s history.

Greg Gent, Chair of the Southern Cross Healthcare Board, said: “Despite the additional challenges of Covid, Chris’ strengths in leadership and his commercial but personal approach to building a strong and sustainable business are very evident and the business remains in a strong position.

“Together with our very capable Executive Leadership Team, the Board is extremely confident that we have a CEO who will lead the business through this exciting and progressive phase in our organisation.”

On his appointment, Mr White said, “Despite the challenges Covid-19 has presented within health, it’s an incredibly exciting sector with huge opportunities to deliver quality outcomes to New Zealanders. Southern Cross Healthcare is a dynamic business filled with fantastic people who are passionate about delivering high quality healthcare experiences and it is a privilege to be in a position to lead our journey from a hospital-centric organisation to a healthcare organisation.”

Chris began with the Southern Cross family as a CEO on the Insurance side of the business in 2017. From there, he moved across to Southern Cross Healthcare as Chief Operating Officer, and then to his current role as Interim CEO in October 2021.

A part of the Southern Cross group, Southern Cross Healthcare comprises a nationwide family of joint venture and wholly owned hospitals; specialist centres; physiotherapy; rehabilitation; and employer health and wellness providers.

Southern Cross Healthcare directly employs more than 2,500 staff across a network of services spanning Whangarei to Invercargill.”


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nib's new non-PHARMAC new Plus add-on, and more daily news

nib has announced that members will be able to add the non-PHARMAC new Plus add-on when buying nib Hospital cover. This means members will have access to Medsafe-approved drugs not funded by PHARMAC. The add-on will also cover the cost of administering the drugs.

"Do you know the true cost of non-PHARMAC drugs?

Drugs are expensive. There’s nearly 1,000 of them that get funded by the government in New Zealand, which is great. But the reality is we have the worst access to funded modern drugs out of 20 OECD countries. 

This is because PHARMAC, the government agency who decide what drugs are funded, can only approve a selection of new treatment options each year. That means some effective drugs for some really serious conditions just don’t make the list.

For people with a range of diseases, from bowel cancer to Crohn’s disease, there are effective treatment options available that they can’t access. Because when they’re not subsidised, they can be simply too expensive for some people.


Introducing our non-PHARMAC Plus add-on

To ease the burden, we’ve launched our new non-PHARMAC Plus add-on option which you can add when you buy nib Hospital cover.

non-PHARMAC Plus gives you access to many Medsafe-approved drugs not funded by PHARMAC. It also covers the costs of administering the drugs. That makes treatment for cancer and other serious conditions more accessible, in either a private hospital or at home.

Add non-PHARMAC cover from $1.24 per week

Our Hospital plans start from $11.07 (3) weekly and are designed to help cover the big health costs like surgery or cancer treatment, giving you fast access to private healthcare. You can add non-PHARMAC Plus to our Hospital plans from just $1.24 per week (2).

You can choose the level of cover that’s right for you. The cover level is the maximum amount we’ll pay towards your eligible claims each policy year for each member covered."

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Russell’s piece on Goodreturns: Govt's proposed income insurance scheme may hurt insurers

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FMA: Manager, Financial Advice role being advertised

Financial Advice publish report, and more daily news

Financial Advice NZ has published the results of the Better Behaviours research The report is a continuum of the 2021 report Trust in Advice. Overall, the report highlights that New Zealanders that have access to financial advice demonstrate better financial behaviours than those without access to financial advice.

“Kiwis who seek out and receive professional financial advice exhibit good financial behaviours more often than unadvised Kiwis. According to Financial Advice New Zealand’s new report, Better Behaviours - research on the value of financial advice, regardless of income level, advised Kiwis are more prepared for retirement, feel better about their financial position and are more comfortable making big financial decisions.

Building on the research report from 2020, Trust in Advice, which clearly showed that financial advice and advisers are trusted and highly valued, the Better Behaviours report measures the extent of positive financial behaviours demonstrated by advised Kiwis compared to those who are unadvised.

The results are clear: advised Kiwis exhibit better financial behaviours:

More than two thirds of advised New Zealanders say that advice has led to outcomes such as a better understanding of the risks of their financial plan (77%), a better understanding of how to achieve financial goals (74%), and they are better equipped to actually stick to these financial plans (70%).

The vast majority of advised consumers say that their advice relationship is meeting their needs. When asked whether the service provided by their adviser met their needs, a strong majority (91%) said yes to at least some extent.

Advised Kiwis are on track for better future outcomes by being better budgeters. With budgets and plans in place, advised consumers are more confident in making big financial decisions with 94% saying they are very or reasonably confident compared to 83% of the unadvised.

Higher use of KiwiSaver will drive better outcomes. Across the advised and unadvised wage/salary earners, both groups had high rates of KiwiSaver contribution (82% vs 72%).

Advised Kiwis understand the value of reviewing and making changes to their mortgage. 86% of advised Kiwis with a mortgage have reviewed that mortgage in the last year, but only 68% of unadvised have done the same. 90% believe those changes will save them money in the long term.

Higher uptake of insurance across age and income levels protects the advised. Almost twice as many advised Kiwis have Life Insurance (59% compared to 32%) and Health Insurance (55% compared to 28%) than unadvised. Usage of other types of insurance such as Income Protection and Total and Permanent Disability Insurance are more than three times higher amongst advised Kiwis than the unadvised (34% and 10%, 31% and 10%).

Understanding risk and reward drives diversification and ongoing investment reviews. Beyond KiwiSaver and property, advised Kiwis are more likely to have other investments (61% vs 35%), indicating they have a wider diversification of investment assets than the unadvised.

Advised Kiwis plan for and expect a better retirement. Across every age band, advised Kiwis feel they have a better understanding of how much money they will need in retirement (62% vs 40% overall).

The Better Behaviours results clearly illustrate that advised Kiwis are more likely to have a

documented budget and financial plan, to review their financial products regularly, to understand risk vs return, and to take-up and cancel insurance products when appropriate. They are also more likely to have positive mortgage behaviours, setting themselves up to save interest and carve years

off the life of their mortgages.

Across the board (mortgage advice, investment advice, insurance advice and financial planning), quality financial advice has given Kiwis the tools to think about their finances in a pro-active way, given them more financial confidence and control, and has had a significant effect on their sense of financial wellbeing.”

In other news

Cigna: From 2 March 2022, the traffic light indicator will be activated on My Score Card. This will display a green, orange or red status along with due dates for any requirements within the Current Learning and Declaration sections of an adviser’s score card.

From Good returns: Advice pays

Asteron Life: Asteron Life is extending the benefits of the Best Doctors service to new and existing customers with Trauma Recovery and Cancer Cover.

Latest goodreturns article: can small independent advice businesses do digital innovation?

My latest piece on goodreturns covers the question of whether digital innovation is the preserve of larger businesses with big budgets - but the good news is that even a small business can be found at this link: Can you do digital insurance advice with a tiny IT budget? - Good Returns