Legal and regulatory update for the life and health insurance sector

18 Feb 2022 – The Takeovers Panel released an updated Guidance Note to clarify the Panel’s approach to determining whether to exercise its discretion to call a meeting under Section 32 of the Takeovers Act 1993 to determine whether a person has breached the Takeovers Code.

21 Feb 2022 – A Stuff media article reported on details of the Government review being undertaken by MBIE to “refresh” KiwiSaver, with the review initiated by the Minister of Commerce and Consumer Affairs. Details of the Stuff article can be accessed at including a link to the Minister’s letter to the Retirement Commissioner dated 13 December 2021.

nib announces Clearhead content series, and more daily news

nib has announced that Clearhead has launched a new content series in partnership with former All Black and Clearhead ambassador Nehe Milner-Skudder. The initiative is designed to support the wellbeing of most at-risk communities and in honour of Mental Health Awareness Week. Clearhead aim to open up a dialogue about mental wellbeing among Maori communities. Throughout the series, Milner-Skudder shares his mental health story and strategies that helped him in his journey. Milner-Skudder has noted that he is proud to be part of the initiative and hopes that his story helps more Māori to seek help when they need it.

“In honour of Mental Health Awareness Week (MHAW) and to better support the wellbeing of our most at-risk communities, Kiwi digital mental health company, Clearhead, has today released further resources to provide more tailored support for Māori, in partnership with nib foundation.

Alongside a suite of culturally appropriate upgrades across its website, Clearhead has launched a new content series with former All Black and Clearhead ambassador, Nehe Milner-Skudder (Ngāti Porou, Tapuika), with the hope of encouraging more open conversation about mental health across Māori communities.

The content series features Milner-Skudder sharing details of his own mental health journey, and the tips and strategies that helped him overcome his struggles – including the importance of reaching out to others for support.

Clearhead CEO, Dr Angela Lim says that while Māori populations are consistently over-represented in Kiwi suicide statistics and are twice as likely to experience mental health issues than non-Māori, most of the resources available in New Zealand are not designed to address these inequities.

“It’s important to note that the loss of indigenous culture and heritage can lead to challenges with identity, confidence, self-esteem, and a sense of belonging. We know from our own user data that Māori are 75% more likely to feel as though they don’t belong – and some of that comes down to not having adequate culturally responsive wellbeing support,” Dr Lim said.

“We wanted to help bridge that gap and respond to the feedback of our Māori users, who want to see content that looks and sounds like them to improve the chances of the material resonating,” she said. 

Clearhead ambassador, Nehe Milner-Skudder, says he’s proud to lend his support to the cause, and hopes that by sharing his story, more Kiwis (and in particular more Māori) will feel more comfortable to reach out when in need.

 “I used to see vulnerability as a weakness, but I’ve grown to understand that it leads to great strength. I think that’s a difficult mental obstacle to overcome, especially as a proud Māori male. What I hope people get from me sharing my story, is that you’re never alone in this battle and that there are resources and tools out there to help anyone who’s struggling,” he added.

The series of 20 videos sharing Milner-Skudder’s journey will be released via Clearhead’s Facebook Page during MHAW and will sit permanently on Clearhead’s website. Clearhead’s Māori-friendly website refresh is also live from today and now incorporates Kiwiana designs and includes a more holistic wellbeing journey, taking into consideration Māori models of care such as Manaakitanga – a principle that captures the idea of caring, supporting and uplifting others.

nib foundation Executive Officer, Amy Tribe, says “While mental illness doesn’t discriminate and can affect anyone, at any stage in their life, we know Māori are 30% more likely go on with these conditions undiagnosed compared to other ethnic groups*.

By funding the development of these resources through our foundation, we hope to help reduce some of the stigma around seeking support and promote Māori feeling more comfortable and empowered to seek help if and when it’s needed,” said Mrs Tribe.”


In other news

Financial Advice: The new draft Constitution

Financial Advice:  Financial Advice NZ 2021 Awards entries close 30th September

FMA: Momentum builds in KiwiSaver as scheme reaches $81 billion

Legal and regulatory update for the life and health insurance sector

17 May 2021 – Department of Internal Affairs advised that it had extended the interim solution for corporate trustee annual AML/CFT report obligations such that a corporate trustee, whose AML/CFT obligations are being fulfilled by a parent law firm, accounting practice or a trust and company service provider (TCSP) that is a reporting entity in New Zealand is not required to submit an annual report by 31 August 2021.

18 May 2021 – FMA Story – “New default engagement requirements a cue for all KiwiSaver providers” outlines the new KiwiSaver default provider member engagement requirements. (Chatswood comment: Noting that anyone eligible to be a KiwiSaver member will be able to join or transfer into any of the new low fee default balanced KiwiSaver funds from 1 Dec 2021, these new member engagement requirements will also apply to such members.)

18 May 2021 – FMA Story – “Pulling our weight in the fight against crime and money laundering” comments on the recent international FATF body assessment of New Zealand’s AML/CFT regime.

Legal and regulatory update for the life and health insurance sector - UPDATED

15 Apr 2021 – Privacy Commissioner’s Office released updated guidance on privacy impact assessments, seen as an essential part of many projects and proposals, and able to be used to identify potential risks.

15 Apr 2021 – Commission for Financial Capability announced the release of the National Strategy for Financial Capability 2021-2024 and the formation of an umbrella group to boost money know-how.

14 Apr 2021 – Following on from recent consultation, FMA released its guidance on managed fund fees and value for money. This was released together with a submissions report and a republished version of the KiwiSaver performance fees guidance.

Most of us have absolutely no issue with the FMA providing guidance on KiwiSaver fees, as Clause 2 of Schedule 1 of the KiwiSaver Act 2006 states that KiwiSaver fees must not be unreasonable. However, the extension of guidance to all Managed Investment Schemes, perhaps even in the future to other financial products under its watch too, possibly under the general conduct provisions, may cause some providers - and even insurers - to wonder just how extensive the FMA role in future pricing may become. Balancing the benefit of a public guardian of the concept of value for money against the benefit of a functioning marketplace and the diversity of offering and innovation that it can offer is therefore certain to be a continuing conversation. It will be interesting to see how industry responds to this prospect. 

14 Apr 2021 – The latest FMA update advised that the FMA had updated the content on its website covering insider trading.

14 April 2021 – The latest FMA update also reminded Financial Advisers to check their Financial Advice Provider has linked to them on the Financial Service Providers Register, noting that Financial Advisers not shown as linked to a licensed Financial Advice Provider, or authorised body, by 16 June this year may face deregistration if they offer no other services.

Lead generation opportunity

We are running a confidential request for information process. A high volume of referrals for a life and health insurance advice business has emerged: the opportunity exists for a specialist life and health advice business to market to substantial flow of leads arising from KiwiSaver inquiries. Chatswood is running a request for information (RFI) process to assess potential adviser business partners for the opportunity to help these clients. If you would like to know more about the process please contact Melissa Waddel at to register your interest and find out more.


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.

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.

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.

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.”

Legal and regulatory update for the life and health insurance sector

2 Oct 2020 – Government released the Request for Proposal documents to appoint the next set of KiwiSaver default providers.

5 Oct 2020 – Department of Internal Affairs posted on its AML/CFT News and Information website information on some of the risks associated with compliance with election financing laws.

5 Oct 2020 – The Financial Advisers Disciplinary Committee website has again been amended such that the “Next Hearing” has been changed from 5 Oct 2020 to 2 Nov 2020, again with no further information provided.

The implications for insurance planning from KiwiSaver experiences and more daily news

A story has emerged of a man who applied to withdraw the full amount from his KiwiSaver account after getting into a car crash, losing his job and failing to keep up with his mortgage repayments and help his mother living in Japan. His bank allowed him to withdraw just $11,000 from the $40,000 he had saved.

“A man who was only allowed to withdraw $11,000 from his KiwiSaver account after crashing his car, losing his job and struggling with his mortgage is a good example of misunderstanding about what the retirement savings scheme is for, experts say.

The man complained to Financial Services Complaints Ltd (FSCL), an external disputes resolution scheme for financial services providers, unhappy he could not withdraw more.

He had about $40,000 in his KiwiSaver account and applied to his bank, also his KiwiSaver provider, to withdraw the full amount so he could buy a new car to allow him to get to job interviews more easily, pay off some of his mortgage to reduce his payments and help his mother, who was living in Japan.

He was only allowed to access $11,000.”

The KiwiSaver trustee informed him that they would give him money to help with the minimum repayment for his mortgage but said that he didn’t need a new car as he could use public transport. The trustee concluded that paying for his mother to visit wasn’t a minimum living cost.

"The man said the money in KiwiSaver account was his and it was ridiculous he was not allowed to withdraw it to help him in a difficult time.”

Upset the man took his case to the FSCL. But the FSCL backed the decision of the trustee saying that it was reasonable. The FSCL highlighted that KiwiSaver withdrawals are intended for first home purchases and relief from serious financial hardship, and believed that the man qualified to accessing a portion of his funds to cover his living expenses.

Financial adviser Liz Koh commented saying that she didn’t believe that rules around KiwiSaver withdrawals should change as there are always ups and downs in life. Instead, Liz believes that people should be prepared for unexpected events.

“Financial adviser Liz Koh said she did not think there should be more flexibility around withdrawals. Life always has ups and downs, and people need to learn to be prepared for the times in life when things don’t go so well. When times are good, savings should be built up as a buffer for when things change for the worse, as inevitably they do.” Click here to read more

Koh makes a good point, with important implications for wider financial planning, and also for insurance planning: an emergency fund is probably the foundation for all financial planning. The immediate buffer between the unfortunate realities of chance and misfortune in the real world and your own quality of life. Many people are finding this buffer to be inadequate. It also highlights an issue with KiwiSaver that reduces flexibility - Kiwi savers cannot expect to treat the fund as if the money is their own. In addition to an emergency fund, to provide any comfort above that necessary for 'minimum living costs' as seen through the eyes of a KiwiSaver trustee, then savers will require substantial additional resources and ideally, a good insurance plan. 

In other news:

The Digital Actuary Virtual Summit

FMA: FMA not backing an investment style despite report

Kōura looking to improve its digital advice platform - the struggle is conversion

Rupert Carlyon, Kōura founder has said since going live, they have given advice to 3,000 people through the company’s digital advice platform. They are looking to roll out new messaging to improve user experience and understanding of their products. Click here to read more

The internet is a great platform for data-rich financial services. Since its earliest days financial services (led by sharetrading) have been a leader in e-commerce. But there is a catch. It has always been difficult to convert a lot of interest into action. We can easily deliver data, calculators, and content - and still struggle to achieve connection, engagement, and action. This is the overarching problem with digital. It is worth working on, but it is hard. 

I was told to stop talking about insurance...

In response to my recent call for help to identify links between insurance and retirement policy, I was told in the nicest possible way that... there aren't any, based on the boundaries drawn by the terms of reference. Although in some respects, there have already been some modest links identified, such as providing for early access in the case of life shortening conditions, which could mean that early access to funds is needed, but not necessarily available under current terms. More certainty around those rules would help with insurance planning. 

On another note, it sparked an interesting debate that included: 

  • whether insurance in superannuation had been helpful, in Australia
  • whether a state mandated minimum insurance package would be helpful
  • what might form part of such a package

For the record, my answers are: 'probably not' to the first two, and therefore 'not applicable' to the last.