Legal and regulatory review for the life and health insurance sector

13 July 2021 – The Department of Internal Affairs released an AML/CFT risk assessment guide covering the NZ-to-Pacific Islands money remittance sub-sector. https://www.dia.govt.nz/risk-assessment-of-the-nz-to-pacific-islands-money-remittance-sub-sector

16 July 2021 – RBNZ, FMA & DIA, the three AML/CFT supervisors, released two AML/CFT documents relevant to all reporting entities:

19 July 2021 – At the request of Government, the Productivity Commission is seeking input into Terms of Reference for a new inquiry into the drivers of persistent disadvantage within people’s lifetimes and across generations. https://www.productivity.govt.nz/inquiries/a-fair-chance-for-all/


FSPR deregistration insights, and more daily news

As of 24 June there are 9,926 financial advisers registered on the FSPR. It is being reported that the number of advisers currently on the FSPR is likely to decrease. Since 15 June, 72 FSPs have been deregistered, with just 51% being voluntary. MBIE business registries national manager Rob Rendle has said that there hasn't been any deregistration because financial advisers failed to link with a FAP, although 550 linking failure notices were issued in June. Those that received the notice will have 20 days to update their registration. Rendle has noted that MBIE will only be able to update the registration figures after the 20 day period.

“Almost 10,000 financial service providers are now registered to provide financial advice in New Zealand according to the Companies Office, up by 748 from March 15 this year.

However, that number is expected to drop with about 550 financial service providers (FSPs) being sent letters from the Companies Office warning them of imminent deregistration.

Statistics (see below) provided to Good Returns by the Ministry of Business, Innovation & Employment state that as of June 24, 9926 FSPs were registered on the Financial Service Provider Register (FSPR), up from 9168 as of March 15.

Since June 15, 72 FSPs have been deregistered - 37 of those were voluntary deregistrations, 34 failed to provide annual confirmation and one was deregistered for failing to provide approved dispute resolution scheme details.

Ministry of Business, Innovation & Employment business registries national manager Rob Rendle says the Registrar has not deregistered any financial advisers for failure to link themselves to a financial advice provider (FAP) "...as he first has an obligation to give notice of intention to deregister".

"On 17 and 18 June we gave notice to those FPSs who had not engaged with a FAP by 15 June 2021. About 550 notices had been issued.

"Those FSPs have a 20 working day objection period within which to update their registration.

"Deregistration numbers won’t be known until the 20 working days has passed, and the Registrar has completed deregistration. FSPs will be sent a notice confirming deregistration once it’s completed," Rendle says.

FSPs on the FSPR:

- FSPs registered as financial advisers on the FSPR as at 15/03/20: 9316

- FSPs registered as financial advisers on the FSPR as at 15/03/21: 9178

- FSPs registered as financial advisers on the FSPR as at 24/06/21: 9926

Financial Adviser FSP removals since June 15, 2021:

- Failure to provide annual confirmation: 34

- Statutory Notification (failure to provide approved Dispute Resolution Scheme details): 1

- Voluntary deregistration: 37” click here to read more

In other news

FSC: FSC established a Health Committee and working groups after merger with HFANZ

FSC: Nominations for the FSC 2021 Awards closing this week

FSC: April Financial Resilience Index

Russell’s piece on Good returns: Death rates and the impact of the End of Life Choice Act

RBNZ: Tide Going Out On Pacific Banking Services

nib: Helen's story


Legal and regulatory review for the life and health insurance sector

18 June 2021 – MBIE published a response to the review completed by PwC on the Research and Development Tax Incentive. https://www.mbie.govt.nz/about/news/research-and-development-tax-incentive-pwc-report/

18 June 2021 – NZX announced four appointments to the NZ Markets Disciplinary Tribunal for a three-year term, including John Dixon QC, Pip Dunphy, Dave Roberton and Rachael Newsome. https://www.nzx.com/announcements/374147

17 June 2021 – APRA released annual life insurance supplementary statistical tables and biannual life insurance institution-level statistics for December 2020. https://www.apra.gov.au/news-and-publications/apra-releases-life-insurance-supplementary-statistical-tables-and-0

17 June 2021 – FMA update released including comment on:

  • Research results on KiwiSaver switching during COVID-19, which showed a high level of switching among young people.

https://www.fma.govt.nz/news-and-resources/media-releases/high-kiwisaver-switching-during-covid19/

  • Gillian Boyes, FMA Manager Investor Capability, has written how the new research points to different ways KiwiSaver providers may better support investors when uncertainty next hits world markets.

https://www.fma.govt.nz/news-and-resources/fma-stories/kiwisaver-fund-switching-and-the-young

  • Financial advice update: Focus shifts to full FAP licensing, with a link to the licensing Guide and application kit

https://www.fma.govt.nz/assets/Licensing-guides/Introductory-guide-to-full-licence-requirements.pdf

  • Financial statements - extension to filing requirements

https://www.fma.govt.nz/news-and-resources/covid-19/temp-extension-reporting/

  • Auditor regulation and oversight plan 2021-2024

https://www.fma.govt.nz/news-and-resources/reports-and-papers/auditor-regulation-and-oversight-plan/

  • Lender responsibilities - information sheet update

https://www.fma.govt.nz/compliance/guidance-library/financial-advice-given-for-the-purpose-of-complying-with-lender-responsibilities/

  • Class exemption - Catalist issuers making 'same class' offers and small offers

https://www.fma.govt.nz/compliance/exemptions/current-exemption-notices/financial-markets-conduct-act-exemptions/financial-markets-conduct-catalist-public-market-exemption-notice-2021/

  • Class exemption - Employee share purchase schemes

https://www.fma.govt.nz/compliance/exemptions/current-exemption-notices/financial-markets-conduct-act-exemptions/financial-markets-conduct-employee-share-purchase-schemes-exemption-notice-2021/

17 June 2021 – RBNZ advised it had finalised bank capital rules and improved the format of banking rules. https://www.rbnz.govt.nz/news/2021/06/reserve-bank-finalises-bank-capital-rules-improves-format-of-banking-rules

15 June 2021 - New research released by the Financial Services Council (FSC) revealed the rise of the digital investor; micro-investing platforms and technology. https://www.fsc.org.nz/bulletin_display/x_blog_code/2150.html

16 June 2021 - Office of the Privacy Commissioner web post advised of its proactive approach to remind and warn individual organisations of their statutory responsibilities under the Privacy Act 2020, including three recent examples. https://privacy.org.nz/blog/opc-sends-warnings-to-organisations-to-get-it-right-next-time/

16 June 2021 – RBNZ advised of its updated shared Memorandum of Understanding (MoU) on macro-prudential policy with the Minister of Finance, including adding debt serviceability restrictions to the list of potential tools available. https://www.rbnz.govt.nz/news/2021/06/debt-serviceability-restrictions-added-to-policy-toolkit


Legal and regulatory review for the life and health insurance sector

24 May 2021 - Results of the 2020 New Zealand Consumer Survey, conducted every two years by MBIE’s Consumer Protection team, became available. https://www.consumerprotection.govt.nz/news-and-media/new-zealand-consumer-survey-2020/

25 May 2021 – FMA media release titled “Thousands of young New Zealanders missing out on investment returns”, referencing fund choice in KiwiSaver. https://www.fma.govt.nz/news-and-resources/media-releases/nz-missing-out-on-investment-returns/

25 May 2021 – Treasury confirmed that the Business Finance Guarantee Scheme will conclude on 30 June 2021. The scheme was established in March 2020 to support small and medium businesses to access credit for cashflow, capital assets and projects related to, responding to, or recovering from, the impacts of COVID-19. https://www.treasury.govt.nz/news-and-events/news/business-finance-guarantee-scheme-conclude-30-june


Legal and regulatory review for the life and health insurance sector

19 Apr 2021 – Dentons Kensington Swan advised that the international Financial Action Task Force (FATF) had consulted private sector stakeholders on an update to FATF guidance on the risk-based approach to virtual assets and virtual asset service providers, with consultation having opened on 19 March 2021 and with submissions closing on 20 April 2021.

https://www.fatf-gafi.org/publications/fatfrecommendations/documents/public-consultation-guidance-vasp.html

20 Apr 2021 – APRA and ASIC released a Life Insurance Claims and Disputes Statistics publication, covering a rolling 12-month period from 1 January 2020 to 31 December 2020. https://www.apra.gov.au/news-and-publications/apra-and-asic-publish-latest-data-on-life-insurance-claims-and-disputes-3

21 Apr 2021 – FMA media release stating that it was warning the funds management industry to avoid advertising large investment returns for the 12-month period to March 31, 2021, as this could mislead investors. https://www.fma.govt.nz/news-and-resources/media-releases/advertising-investment-returns-could-mislead-investors/

21 Apr 2021 – MBIE opened consultation on outstanding aspects of the upcoming regime governing conduct in the financial sector, including consulting on regulations covering matters such as requirements for claims handling and complaints processes, prohibitions of certain types of sales incentives, and the treatment of intermediaries, with submissions closing on 4 June 2021. https://www.mbie.govt.nz/about/news/consultation-opens-on-additional-measures-in-new-financial-conduct-regime/

21 Apr 2021 – Parliamentary website updated for the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill, showing submission closing date as 28 May 2021 and report date as 16 Aug 2021. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_109905/financial-sector-climate-related-disclosures-and-other

21 Apr 2021 – IRD advised that it has identified several errors in the recent special report on the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021, and is currently in the process of updating it. An updated version will be published by early next week. https://taxpolicy.ird.govt.nz/news/2021/2021-04-21-updates-required-special-report


Legal and regulatory update for the life and health insurance sector

6 Apr 2021 – The committee stage of the Financial Markets Infrastructure Bill was completed. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_93550/financial-market-infrastructures-bill

6 Apr 2021 – The first reading of the Incorporated Societies Bill was completed, with the Bill referred to the Economic Development, Science and Innovation Committee, with report back due by 6 Oct 2021. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_109429/incorporated-societies-bill


Legal and regulatory update for the life and health insurance sector

1 Apr 2021 – MBIE published a discussion document seeking public input into problems and proposed options to address jurisdictional inconsistencies between approved dispute resolution scheme rules, with submissions closing on 6 May 2021. https://www.mbie.govt.nz/have-your-say/review-of-approved-financial-dispute-resolution-scheme-rules/  This review process does not include the option of merging the scheme (along the lines of the Australian approach). The review looks at limits, consistency, and jurisdictional issues that may affect claimants. It is well worth taking a look at the document - advisers that have had claims would be advised to take a look too, your feedback may be especially valuable. 


Legal and regulatory update for the life and health insurance sector

10 Mar 2021 – Commerce Amendment Bill introduced into Parliament. The Bill amends the Commerce Act to strengthen the prohibition against misuse of market power and make other changes to improve the functioning of the Act. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_108304/commerce-amendment-bill


AIA Vitality enhancements on the horizon, and more daily news

AIA chief partnership insurance officer Sam Tremethick shared insights on AIA Vitality to mark the anniversary of the launch. Tremethick noted that AIA Vitality has been embraced by clients and the wider community. Although AIA has reported a high level of engagement, Tremethick has said that the insurer is looking to introduce enhancements next month. Tremethick described AIA Vitality as the cornerstone of what AIA does in terms of shared values.

““We’re over a year into Vitality being launched here in New Zealand, and the great thing is that the community and our clients have really taken to it,” Tremethick commented.

 

“We’re planning to release some further updates in March which will provide some further benefits to clients, and a further update will happen in June.”

 

“We’re continuing to evolve, but we’re already seeing some incredibly high levels of engagement,” he added.

 

“The release of the Apple Watch benefit last year also increased people’s interest in the programme, so we’re certainly continuing to come up with new ideas.”

 

Tremethick says that Vitality has been key to its mission of helping Kiwis improve their health and catch illnesses early, and he says the annual health check benefit and premium incentives have been very successful in promoting these goals.

 

“For us, Vitality is the cornerstone of what we do in terms of shared values,” he said.” Click here to read more

 

In other news

Financial Advice: Financial Advice has reported that they are continuing to develop new tools regarding disclosure, and looking to release it in the next 10 days

nib: 2 Months Free Health Insurance on any new Ultimate Health Max, Ultimate Health or Easy Health policy offer ends 28 February 

MBIE: MBIE has updated the FSPR with information on FAP linking


Insight into FSPR usage, and more daily news

MBIE has published a document covering adviser and FAP responsibilities under the new regime. The document first sets out the rules of engagement, stating that every adviser must be engaged or linked to a FAP. Advisers must ensure the FAP registers the engagement on the FSPR. But to link to FAPs, advisers must first provide the FAP with their name and FSP number.

 From 15 March, advisers must have these things before linking to a FAP:

  1. A RealMe® login
  2. An online services account with the FSPR
  3. Authority to update records on behalf of the financial advice provider

In order for advisers and FAPs to engage, FAPs must:

  1. Log in to your online services account using your RealMe ID and password, and locate your registration in the ‘FSP Registrations’ tab of your dashboard.
  2. On the ‘View FSP details’ screen, select the ‘Financial Services’ tab and click the ‘Maintain Financial Services’ button.
  3. Scroll down to the ‘Financial advice service’ where you’ll see the FAs, if any, that you’re linked to.
  4. Click the ‘Add Financial Adviser’ button and search for the FA you wish to engage, using their FSP number or name. Select the FA from the drop-down list, and indicate whether or not they will be covered by your dispute resolution scheme (DRS).
  5. Repeat step 4 above for each new financial adviser you add. Please note, multiple advisers are displayed alphabetically. (Cont.)
  6. When you’ve finished updating your registration, click on ‘Next Step: Declaration’. Review and confirm the declaration.
  7. Click on ‘Next Step: Review’. Review the information you have entered and tick the check box to confirm the information is true and accurate
  8. Click on the ‘Submit’ button at the bottom right of the screen.
  9. Viewing the FAPs financial services, you’ll see that the FAs now appear on the ‘Financial Services’ tab.

To support the new regime being implemented, the FSPR will also be updated. The Companies Office will release guidelines and videos to help users closer to the date.

This video shows the engagement process.

In other news

Fidelity Life: Dan Wilkinson joined Datacom #RightCloud panel

Cigna: Multi-Benefit Discount promotion that applies a discount up to 7% on Life Cover or Life Income Cover with an additional benefit is set to end February 28, 2021

Partners Life: Is data the key to understanding underinsurance?