Legal and regulatory update for the life and health insurance sector

23 Mar 2021 – The IRD advised that the changes to property taxation announced by the Government today will be included in Supplementary Order Paper to the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Bill. https://taxpolicy.ird.govt.nz/news/2021/2021-03-23-government-property-announcements


Legal and regulatory review for the life and health insurance sector

4 Mar 2021 - Overseas Investment Amendment Bill (No 3), introduced on 14 May 2020, reported back to Parliament. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_97807/overseas-investment-amendment-bill-no-3

4 Mar 2021 – APRA released separately the statistics for December 2020 for life insurance and general insurance. Weblinks are https://www.apra.gov.au/news-and-publications/apra-releases-life-insurance-statistics-for-december-2020 and https://www.apra.gov.au/news-and-publications/apra-releases-general-insurance-statistics-for-december-2020

4 Mar 2021 – Financial Advisers Disciplinary Committee issued its penalty determination on the case decision released in Jan 2021 regarding Code Standard breaches. The FADC imposed the penalty that the Respondent is censured for the Code breaches together with permanent suppression of identity. https://fadc.govt.nz/decisions/

4 Mar 2021 – Commission for Financial Capability announced that it had launched achievement standard resources through its Sorted in Schools programme. The resources are designed to be taught by teachers as part of day to day classes in Statistics and Economics for students studying toward NCEA Levels 1 and 2. https://cffc.govt.nz/news-and-media/news/money-lessons-offer-ncea-excellence-grades/

5 Mar 2021 – FMA issued a public warning to the adviser for KiwiSaver advice given generally to switch funds in the wake of COVID-19 and market volatility in March 2020. https://www.fma.govt.nz/news-and-resources/media-releases/fma-warns-financial-adviser-kiwisaver-covid19/

5 Mar 2021 – IRD advised that the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Bill, introduced on 4 June 2020, was reported back to Parliament on 4 March 2021. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_98047/taxation-annual-rates-for-2020-21-feasibility-expenditure


Legal and regulatory update for the life and health insurance sector

22 Feb 2021 - KiwiSaver (Life-shortening Congenital Conditions) Amendment Regulations 2021 (‘Regulations’) were released, coming into force on 26 March 2021. This is an important component of planning life risk - especially as KiwiSaver balances rise. It isn't quite the predictable model for early withdrawals we would have liked, but valuable for those it does cover, enabling some access to funds where a person's life expectancy is going to be shortened due to our of the listed conditions.  https://www.legislation.govt.nz/regulation/public/2021/0025/latest/LMS449982.html

1 Mar 2021 - The Minister of Revenue indicated an intention to introduce legislation to relax New Zealand’s loss continuity rules to allow businesses better access to capital via a supplementary order paper to the Taxation (Annual Rates for 2020-21, Feasibility Expenditure, and Remedial Matters) Bill later in March. https://taxpolicy.ird.govt.nz/news/2021/2021-03-01-introduction-new-business-continuity-test-tax-losses

1 Mar 2021 – IRD FATCA email update covered:

  • S. IRS announced voluntary changes to the FATCA schema for reporting of missing US TINs with application to this coming 2021 FATCA reporting period ended 31 March 2021; and
  • A general reminder to New Zealand Financial Institutions ("NZFIs") about the (aggregated) account balance reporting thresholds that apply to whether a person’s financial accounts are reportable. 

2 March 2021 – IRD sought feedback on 10 proposed remedial changes to the foreign trust disclosure rules, which were enacted in the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017. Submissions close on 23 March 2021. https://taxpolicy.ird.govt.nz/news/2021/2021-03-02-feedback-sought-foreign-trust-remedials

Feb 2021 - Insurance (Prudential Supervision) Act 2010 (IPSA) RBNZ Review – New submission closing date set of 19 March 2021.

1 March 2021 – NZ Police Financial Intelligence Unit released its Dec 2020-Jan 2021 “Suspicious Activity Report.” https://www.police.govt.nz/sites/default/files/publications/fiu-monthly-report-dec2020-jan2021.pdf


Legal and regulatory review for the life and health insurance sector

23 Feb 2021 – IRD released a special report on the new resurgence support payment legislation. https://taxpolicy.ird.govt.nz/news/2021/2021-02-23-special-report-resurgence-support-payment

24 Feb 2021 – Companies Office published the following notice on it FSPR website: https://fsp-register.companiesoffice.govt.nz/

FSPR online services will be unavailable from 5pm Tuesday 2 March 2021 to 8am Monday 15 March 2021 while we update the register to support the new financial advice regime that comes into effect on 15 March 2021.

During this period, you will be able to search the public register, but you won't be able to log in to your online services account to file, update, or access information regarding your financial service provider.

However, FSP’s wishing to give notice of their intention to apply for a transitional licence during this period can still do so. Shortly we will publish forms and information on how to apply during the outage.

23 Feb 2021 – Hone David Clark, Minister of Commerce and Consumer Affairs, diary released for January 2021, containing just 9 items, none identified as directly relevant to financial services. https://www.beehive.govt.nz/sites/default/files/2021-02/Min%20Clark%20Ministerial%20Diary%20January%202021.pdf

23 Feb 2021 – The Department of Internal Affairs advised that it is undertaking a review of sector specific guidelines for accountants, lawyers and conveyancers, and real estate agents, and is offering a survey for completion as a means to provide feedback on the guidelines. https://www.dia.govt.nz/AML-CFT-DNFBPs---Help-us-improve-our-guidance

15 Feb 2021 - The FMA released the Financial Markets Conduct (NZX Derivatives Market Rules) Approval of Rule Change Notice 2021. The notice came into effect from 15 February 2021.


Legal and regulatory update for the life and health insurance sector

2 Dec 2020 – IRD advised that the Minister of Revenue David Parker introduced the Taxation (Income Tax Rate and Other Amendments) Bill into Parliament on 1 Dec 2020. Parliament agreed to accord the Bill urgency. The Bill contains four main measures:

  • introducing a new top personal income tax rate of 39%
  • introducing increased disclosure requirements for trusts
  • increasing the Minimum Family Tax Credit threshold for the 2020–21 tax year, and
  • clarifying more generally that Inland Revenue can request information solely for tax policy development purposes.

All parliamentary stages, including the Third Reading, were completed on 2 Dec 2020. https://taxpolicy.ird.govt.nz/news/2020/2020-12-02-introduction-taxation-income-tax-rate-other-amendments-bill

2 Dec 2020 – Financial Services Council released the third and final part in its Money and You research series - ‘Breaking through the Advice Barrier’ - focused on what is stopping people from getting financial advice, and why it’s important that more New Zealanders have access to it. https://www.fsc.org.nz/bulletin_display/x_blog_code/2121.html

2 Dec 2020 – Good Returns story on an Australian report released by Key Person Risk Management on the potential costs and implications for the life insurance industry of removing commissions and replacing them with a fee for service basis. https://www.goodreturns.co.nz/article/976517905/australian-report-raises-alarm-over-life-insurance-s-future.html

3 Dec 2020 – Department of Internal Affairs issued an AML/CFT update on expiring regulations timeframe and the impact on independent audit obligations. The Ministry of Justice has advised that the timeframes for amending these regulations has changed and the Ministry now aims to have new regulations in force by July 2021. Note the resultant impact on timeframes for reporting entities with an independent audit due prior to July 2021. https://www.dia.govt.nz/AML-CFT-Update-to-expiring-regulations-timeframe


Legal and regulatory update for the life and health insurance sector

23 Nov 2020 – IRD advised of technical changes to the OECD Common Reporting Standard (CRS) for 2021 relating to the Automatic Exchange of Information (AEOI) for Tax Purposes, which may have an impact on reporting New Zealand financial institutions. CRS reporting for the 31 March 2021 year, due to be filed with Inland Revenue by 30 June 2021, will need to comply with the new standard. https://www.ird.govt.nz/international-tax/exchange-of-information/crs/registration-and-reporting/changes-crs-2021


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.


Legal and regulatory update for the life and health insurance sector

25 Sept 2020 – Good Returns reports that the Australian government is set to axe responsible lending laws. https://www.goodreturns.co.nz/article/976517550/australia-to-scrap-responsible-lending-laws.html

23 Sept 2020 – IRD advised that the Public Guidance Work Programme 2020-21 has now been finalised. https://www.taxtechnical.ird.govt.nz/-/media/project/ir/tt/pdfs/consultations/work-programmes/public-rulings-work-programme-2020-2021.pdf

24 Sept 2020 – FMA released a report on its supervision activities over the past 18 months. https://www.fma.govt.nz/news-and-resources/media-releases/fma-issues-supervision-report-2020/

Commentary: 

The development in Australia where responsible lending rules are being axed is of considerable interest. In specific terms I do not know enough about the details of the Australian lending legal and regulatory framework to comment. In general terms there are some good questions to be asked about what rules are fit for purpose in an environment with very low interest rates for borrowing and with other consumer protections and processes available. I shall take a look at that development with some interest. Given the involvement of our current Minister of Commerce and his work on predatory lending practices I doubt this is going to appear on his agenda. 


Legal and regulatory update for the life and health insurance sector

9 Sept 2020 – IRD issued guidance on the taxation of cryptoassets. https://www.ird.govt.nz/cryptoassets

10 Sept 2020 - Financial Advice New Zealand have created a Virtual Conference/ Regional Roadshow, with the conference hosted over four regions in a different region each day over 21-24 Sept, with the Auckland event being online. https://financialadvice.nz/conference-2020-home/

14 Sept 2020 - The Reserve Bank announced that it will be relaunching the review of the Insurance (Prudential Supervision) Act (IPSA) in October 2020. A policy paper outlining the resumption of the IPSA Review, and objectives and topics to be covered, will be published in early October. It will provide an updated overview explaining objectives, topics to be covered and an indicative timetable. At the same time, the RBNZ will release a consultation paper on principles to guide the review of Solvency Standards. https://www.rbnz.govt.nz/news/2020/09/work-on-insurance-act-review-resumes