Budget allocates $60 million to establishment of NZIIS and delays implementation to 2024, and other news

On 19 May Finance Minister Grant Robertson presented the Government’s Wellbeing Budget, allocating $60 million to support the continuing development of the New Zealand Income Insurance Scheme (NZIIS).

The amount will fund the Accident Compensation Corporation (ACC) to undertake preliminary work to establish the systems and operational processes for a new levy-funded income insurance scheme.

The proposed implementation has also been pushed back from 2023, with Robertson saying

“There is considerable work to get the scheme up and running, and it is now expected that it will be operational in 2024.”

Insurance Business spoke to Deloitte NZ tax partner Robyn Walker, who said

“The sensible decision to not rush this through means that the New Zealand Income Insurance Scheme may become a significant matter for voters to evaluate as we head into Election 2023.”

More daily news:

Dispute before ombudsman about income earned while on claim for income protection insurance policy

Members of TripleA Association to vote whether to wind up association

Entries for Insurance Business's Top Insurance Employers 2022 close 27 May

In Finder’s RBNZ survey, 100% of experts predict OCR increase in May

And a bit of light humour from xkcd here

Legal and regulatory review for the life and health insurance sector

28 Sept 2020 – Council of Financial Regulators published an updated table of deferred regulatory initiatives due to COVID-19, originally issued in April 2020. https://www.fma.govt.nz/assets/Uploads/CoFR-Timetable-of-Regulatory-initiatives-September-2020.pdf

28 Sept 2020 – The Ombudsman released the results of a survey on access to government information. https://www.ombudsman.parliament.nz/news/ombudsman-releases-access-government-information-survey

The Chief Ombudsman Peter Boshier says too many New Zealanders are still unaware of their rights to request information from Ministers, government agencies, and councils despite a growing thirst for information by the public.

The release of the data coincides with International Access to Information Day 2020 which acknowledges the importance of access to information laws and the community’s right to know.

28 Sept 2020 – The Privacy Commissioner released the submission completed to the Ministry of Justice on n New Zealand accession to the Budapest Convention on Cybercrime. https://www.privacy.org.nz/assets/2020-09-21-OPC-Submission-on-public-consultation-re-Budapest-Convention-A709592.pdf

Client neglect result in increased complaints

With restrictions placed on movement, advisers were unable to visit clients. We can assume that clients would want to speak to their advisers at this time to discuss their options. We can also assume that this has been a busy time for advisers. As demand increased, some clients have felt that their needs have not been properly catered to. As a result, FSCL has reported an increase in complaints.

“FSCL chief executive Susan Taylor said her disputes service had noticed a few extra complaints about advisers since the Covid-19 outbreak hit.

Some clients were upset when they discovered that an income protection policy did not cover them for the loss of a job. Others had been disappointed when they found their business interruption cover would not cover them for being closed during the pandemic.”

In comparison,

At IFSO, there had been 14 complaint inquiries and one complaint about advisers since April 2, which a spokeswoman said was about the same level as normal.click here to read more

In other news: 

How hard has it been to write new business during COVID-19?

Crisis means clients understand the value of insurance - broker

FMA: Guidelines for Financial Services businesses and staff under COVID-19 Alert      Level 2

Workspace: Our expectations about contact tracing

Call to Change Insurance Law to Stop 'Ruined Lives'

Susan Edmunds reports on Stuff.co.nz that

'According to the Insurance and Financial Services Ombudsman New Zealand needs a law change to stop people "ruining their lives" by not disclosing relevant information to their insurers. It is believed that many cases of a declined claim the insurance had been bought online and that insurers should be doing more to highlight to consumers what is required.'

My first thought was that the industry appears to be moving in the opposite direction. The use of more non-underwritten product makes claim decline for an existing medical condition much more certain than it would be for a fully underwritten product - even with the risks of non disclosure.

On the other hand, an adviser friend felt that more non-underwritten product was helpful. A person with a health condition that they did not wish to disclose (sometimes out of fear, forgetfulness, or embarrassment)  that would be excluded would be focused on that by the exclusions explanation, instead of thinking that they could 'get away with it.

Either outcome depends heavily on how advisers discuss the duty of disclosure in fully-underwritten cases and how salespeople use non-underwritten products in comparison. Given the outcome is so predicated on likely practice I would be interested to hear from advisers on the subject. What do you think? What have you found from clients that have been sold non-underwritten product?

Click here to read Edmunds' full article.