Legal and regulatory review for the life and health insurance sector

13 May 2021 - Overseas Investment Amendment Bill (No 3) completed second reading in Parliament. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_97807/overseas-investment-amendment-bill-no-3

14 May 2021 – Government announced the new default KiwiSaver provider arrangements, which will take effect once the terms of the current providers end on 30 November 2021, noting a reduction in default providers from nine to six, with the providers from 1 Dec 2021 including Bank of New Zealand, Booster, BT Funds Management (Westpac), Kiwi Wealth, Simplicity and Smartshares (NZX). Relevant weblinks follow:

https://www.beehive.govt.nz/release/kiwisaver-default-provider-scheme-improvements-slash-fees-boosts-savings

https://www.fma.govt.nz/news-and-resources/media-releases/new-default-kiwisaver-settings-designed-to-benefit-members/

https://cffc.govt.nz/news-and-media/news/kiwisaver-default-providers-2021-2028/

14 May 2021 – The Department of Internal Affairs published comment on its use of targeted compliance assessments that focus on the effectiveness and implementation of specific AML/CFT obligations in practice, noting the recent use of this approach to focus on the requirement for a reporting entity to have an independent AML/CFT audit conducted every two years. https://www.dia.govt.nz/AML-CFT-Targeted-Compliance-Assessments---Independent-Audit


Legal and regulatory update for the life and health insurance industry - updated

12 May 2021 – Government announced its next steps to reduce merchant service fees that banks charge businesses when customers use a credit or debit card to pay by introducing a Retail Payments Systems Bill later this year to:

  • require reductions in interchange fees as soon as possible
  • enable direct intervention by the Commerce Commission using a broad suite of powers to regulate different participants in the retail payment system
  • introduce a disclosure and reporting requirement to enable the Commerce Commission to monitor the retail payments system.

    We think this of great interest - as with several other discussions, including FMA comments on 'reasonableness' of fees for managed investment schemes and comments from     government coalition partners calling for rent controls, there seems to be a far greater willingness to contemplate direct intervention in markets. While we all like to think we are     reasonable people, the difficulty is forming a common view around what is reasonable. The marketplace has some powerful built-in stabilisers that usually work quite well. My view is     the regulation supporting the operation of the market is preferable. 

https://www.beehive.govt.nz/release/govt-deliver-lower-card-fees-business

A copy of the Cabinet paper, and the submissions received, can be found on the Ministry of Business, Innovation and Employment (MBIE) website at the following link: https://www.mbie.govt.nz/business-and-employment/business/competition-regulation-and-policy/retail-payment-systems/

12 May 2021 – The Privacy Commissioner welcomed the signing this week of a memorandum of understanding with the UK’s Information Commissioner establishing a framework for cooperation between the Office of the Privacy Commissioner and the Information Commissioner’s Office for cross-border cooperation and to foster international collaboration. The framework sets out broad principles of collaboration between the two regulators and the legal framework governing the sharing of relevant information and intelligence between them but excludes the sharing of personal information.

https://privacy.org.nz/publications/statements-media-releases/opc-ico-mou-signing/

12 May 2021 – The RBNZ published an analytical note titled, “An overview of the distributional effects of monetary policy - Low interest rates - who are the winners and losers?” https://www.rbnz.govt.nz/research-and-publications/analytical-notes/2021/an2021-05


Asteron Life underwriting enhancements, and more daily news

Asteron life announced that as of 5 May 2021 enhancements have been made to the Underwriting Rules Engine (URE) within AsteronConnect. Asteron Life has said that the implementation of these new rules will mean more new business applications will be issued immediately through AsteronConnect.

Changes include:

  • Improvements to straight through acceptance rate for both advisers and customers
  • More assessments and acceptance of mental health conditions
  • More acceptance of Covid-19 related answers

“At 9pm on Wednesday 5 May we’re making some enhancements to our Underwriting Rules Engine (URE) within AsteronConnect. With these enhanced URE rules, more new business applications through AsteronConnect will be able to be issued immediately.

Some of the key changes you will notice are:

  • The Straight Through Acceptance rate for Advisers & customers is being improved - including both standard and substandard outcomes (exclusions, % loadings and combinations thereof).
  • More Mental Health conditions will be assessable and accepted by the URE, rather than referring to an Underwriter.
  • We are enabling more Covid-19 related answers to be accepted through the URE, especially
    1. For employee applicants requesting income protection.
    2. For self-employed applicants impacted by Covid-19 related trading restrictions.
  • For applicants not currently receiving a Government Covid-19 wage subsidy or other business income support and not working in the hospitality, travel, tourism or the international student education sectors.
  • For applicants with intended foreign travel plans that do not require a 14-day quarantine period upon their return to New Zealand. 

Advisers using paper applications will still need to complete the Covid-19 supplementary questionnaire when applying for cover.”

In other news

Russell’s piece in Good returns: Sharing is caring - consumer data rights for the advice sector

RBNZ: The Future Is Māori

Strategi: top tips for FAPland

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Quotemonster and Advicemonster updates - live now

We have updated the quotemonster site, on Thursday, and made the following items live, for more detail see below:

  1. New SOA report content setting options allow you to create more customisations for your SOAs if you are an Advicemonster subscriber. To access these click settings, then SOA Setting, then Report Content Setting
  1. New SOA template for Need analysis recommendation note pad - bring through all your calculations from the recommendation notepad in Advicemonster to quote and to the SOA.
  1. New nib rates applied to the site
  1. FSP input validation for user setting and register form - so it is important that your FSP number matches your name and the entry on the FSPR. A reminder that sharing your login is a breach of our terms and conditions and unusual account activity (like switching user names) will be picked up and we will be contacting account-holders that actively share their logins. 
  1. Improved the health product breakdown table in the research report.
  1. Applied Fidelity level standalone trauma maximum level term rule
  1. Changed Partners Life IP and MP max-age to 57 - as we do not quote reduced commission versions of income protection
  1. Update Web version number to v 3.8.7

Congratulations to Albert, Doreen, and the whole team on a big package of updates. Our special thanks to the advisers sending us issues and suggestions for improvement of the Advicemonster process and the SOAs. 


QPR: Updates for Implementation of new FSLAA Regime

To help you prepare for the implementation of the Financial Services Legislation Amendment Act implementation on 15 March Quality Product Research Limited has made the following changes to the Quotemonster site:

  1. Prepared an outsourced provider statement. This provides you with information to meet the license conditions for a Financial Advice Provider to use a third party (us) as part of your advice process (for example: preparing comparison quotes and research reports). Subscribers to the research and advicemonster services will see an announcement when they next log in. A link to the outsource provider statement is included in the site in the About Us section. 

  2. Updated Advicemonster – an external review has been conducted, the draft statement of advice (SOA) has been updated, and the system for preparing the SOA has been improved. If you are an Advicemonster subscriber we suggest you run a new trial needs analysis to check out the new report – it is a more comprehensive and robust document that speeds up the process of creating new life and health statements of advice. If you don’t subscribe, or you would just like a quick refresher on how to use the system, click here to request a demonstration.

  3. Updated our terms and conditions – refer this link for details. Also, a link to the terms is included in the site in the About Us section, and on every page in the site. 

Coming up: there will be further changes to the adviser profile page to reflect changes to the FSPR due to the new license regime. We will update you on those next week. If you have any questions or concerns, please contact us or call (09) 480 6071. Thank you for being a customer of Quality Product Research Limited.


Legal and regulatory review for the health and life insurance sector

1 Feb 2021 – Minister of Commerce and Consumer Affairs, Hon David Clark, December 2020 diary released with the following potential financial services sector related meetings noted:

  • 2 Dec 2020 – Announcement of clearer lending rules (Attendees not listed)
  • 2 Dec 2020 – Meeting with NZ Bankers Assn (Chief Executive, Government Relations Director, Policy Director, of NZBA)
  • 4 Dec 2020 – Attendance at NZBA end of year luncheon
  • 9 Dec 2020 - Meeting with Commission for Financial Capability (Retirement Commissioner)
  • 10 Dec 2020 – Announcement about Merchant Service Fees (Attendees listed as “stakeholders”)
  • 10 Dec 2020 – Meeting with Financial Markets Authority (Chair, Chief Executive, Director Strategy, of the FMA)
  • 14 Dec 2020 – Meeting with Citizens Advice Bureau (Chief Executive of CAB)
  • 15 Dec 2020 – Meeting with Financial Services Federation (Executive Director, Board Members of FSF)

https://www.beehive.govt.nz/sites/default/files/2021-01/Hon%20Dr%20David%20Clark%20Proactive%20Diary%20Release%20December%202020.pdf


Legal and regulatory update for the life and health insurance sector

27 Jan 2021 – Privacy Commissioner announced that he will virtually chair an international Computer Privacy and Data Protection conference over 27-29 Jan, commencing NZ time 5 p.m. on Thursday, 28 Jan, with a live stream available. https://www.privacy.org.nz/resources-2/forums-and-seminars/computer-privacy-and-data-protection-conference-cdcp/

28 Jan 2021 - FMA released its review of NZX technology issues finding the stock exchange failed to meet its licensed market operator obligations due to insufficient technology resources. NZX also released a response to the FMA review. Relevant FMA and NZX web links are https://www.fma.govt.nz/news-and-resources/media-releases/fma-releases-review-of-nzx-technology-issues/ and https://www.nzx.com/announcements/366811

28 Jan 2021 – RBNZ released the results of a research report showing the Māori economy is increasingly diverse and opportunities remain for it to continue growing and reach its full potential. https://www.rbnz.govt.nz/news/2021/01/e-hauora-ana-e-matahuhua-ana-te-ohanga-maori-e-ai-ki-nga-rangahau


FSC Get in Shape Conference

The FSC Get in Shape Conference is just around the corner and we thought it was a good time to highlight what to expect if attending. The conferences will be held in Wellington, Auckland, Christchurch and Dunedin. The FSC has ensured relevant topics are discussed by industry leaders in the sessions and Masterclass. Highlights of the conference include:

  • Meet and engage with the leaders shaping our sector and regulatory landscape. These include Leaders from the MBIE, the FMA, the CFFC and the financial advisory sector.
  • Consumer focus - We will unpack the latest research from across the NZ and the globe  and understand how Financial Advice is helping Kiwis lead better lives.
  • Engage with Leading legal minds at the Masterclass - The masterclass is curated by those that understand what it really means to succeed under the new regulation. Our line up of legal experts and leading advisers will be run in a practical workshop style to have you thinking outside the box and teach you how to best use resources available to you.
  • Connect  and network with your colleagues - After a very tough 2020, join your colleagues for a morning of learning, engaging and getting inspired for the year ahead.
  •  Meet  you in the market place – Once again our marketplace expo is the meeting place to connect with your suppliers and partners.
  • CPD -  Get your CPD & learning program off to a strong start for 2021. All sessions will be assessed and all attendees will receive CPD certificates for sessions attended. 

Those interested in attending can register here and find the dates and location below.

WELLINGTON
Wednesday, 10 February 2021
Arrival from 7:15am, welcome at 8:00am, advice summit close 12:45 followed by Masterclass from 1.15pm until 3.15pm

Members Gallery
Sky Stadium
105 Waterloo Quay
Pipitea,
Wellington 6140

AUCKLAND
Thursday, 11 February 2021
Arrival from 7:15am, welcome at 8:00am, advice summit close 12:45 followed by Masterclass from 1.15pm until 3.15pm

North Level 5 Lounge
Eden Park Function Centre
10 Reimers Ave
Kingsland
Auckland 1024

CHRISTCHURCH
Wednesday, 17 February 2021
Arrival from 7:15am, welcome at 8:00am, advice summit close 12:45 followed by Masterclass from 1.15pm until 3.15pm

Tait Technology Centre
245 Wooldridge Road
Harewood
Christchurch 8051

DUNEDIN
Thursday, 18 February 2019
Arrival from 10:00am, welcome at 10:30am, close 3.00pm followed by Masterclass from 3.15pm until 5.15pm

Dunedin Centre
1 Harrop Street
Dunedin 9016

Get In Shape 2021 Big Banner v1 - Financial Services Council


Legal and regulatory update for the life and health insurance sector

10 Jan 2020 – RBNZ announced that it is responding with urgency to a breach of one of its data systems. A third-party file sharing service used by the Bank to share and store some sensitive information, has been illegally accessed. https://www.rbnz.govt.nz/news/2021/01/reserve-bank-responding-to-illegal-breach-of-data-system

6 Jan 2021 – Police Financial Intelligence Unit released the November 2020 Suspicious Activity Report. https://www.police.govt.nz/sites/default/files/publications/fiu-monthly-report-nov-2020.pdf


Legal and regulatory update for the life and health insurance sector

23 Dec 2020 - The Commerce Commission released its updated Authorisation Guidelines that explain its approach to assessing applications to authorise agreements or mergers in the public interest. https://comcom.govt.nz/news-and-media/media-releases/2020/commission-publishes-revised-authorisation-guidelines-and-application-forms

23 Dec 2020 – The Open Government Partnership released Progress reports for Third National Action Plan and Meeting Papers. https://ogp.org.nz/latest-news/progress-reports-for-third-national-action-plan-and-meeting-papers/

22 Dec 2020 – Courtesy of Dentons Kensington Swan, note the release of the following regulations and other information during this month, in addition to those items included in the FMA update or the MBIE release on 17 Dec 2020:

  • Financial Markets Conduct (Fees) Amendment Regulations 2020
  • Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Act Commencement Order 2020
  • Financial Markets Conduct (Licensing of Administrators of Financial Benchmarks) Amendment Regulations 2020
  • Financial Markets Conduct (Overseas Providers of Custodial Services – Assurance Engagement) Exemption Notice 2020
  • Financial Markets Conduct (Australian Licensees) Exemption Notice 2020

22 Dec 2020 – Courtesy of Dentons Kensington Swan, note the submission opportunities closing at the start of 2021 as follows:

Ministry of Business, Innovation and Employment:

  • Updating the Responsible Lending Code – submissions close 15 January 2021, 5pm.
  • Regulating to reduce merchant service fees – submissions close 19 February 2021, 10am.

Reserve Bank of New Zealand:

  • Review of the Insurance (Prudential Supervision) Act 2010 (scope of the Act and treatment of overseas insurers) – submissions close 18 February 2021.
  • Review of the Insurance Solvency Standards – submissions close 18 February 2021.
  • Reinstating Loan-to-Value Ratio restrictions – submissions close 22 January 2021.

Financial Markets Authority:

  • Proposed guidance on advertising offers – submissions close 16 February 2021.

Parliament:

  • Reserve Bank of New Zealand Bill – submissions close 4 February 2021.