Insurers on transgender health cover, And more daily news

The availability of health insurance for transgender individuals was brought forward to the Finance and Expenditure Committee in June 2019 in the form of a petition. Elizabeth Poucher, the driver of the petition, stated that transgender women are unable to get the same level of cover as cisgender women.

“Elizabeth Poucher brought a petition asking for the House to conduct an inquiry into the availability of health insurance for transgender people's care related to transitioning.

She said that transgender people were often unable to get cover for things such as breast cancer, which were affected by hormone treatment, although a male-to-female transgender person was no more at risk than a cisgender woman. Poucher said that while people could sometimes get cover for other pre-existing conditions if they were willing to pay a premium loading, that was not the case for transgender people.”

In response, Roger Styles, Health Funds Association CEO has said that insurers look to offer affordable products and that transgender care was often excluded due to high costs associated with transitioning. For this reason, Styles says that exclusions are not discrimination against the transgender community.

“Health Funds Association chief executive Roger Styles said insurers had to be able to offer an affordable product that was appealing to people to voluntarily purchase.

Transgender care was excluded because of the high cost of the transition process, he said, and the risk of adverse selection. People who thought they might transition would take out cover that would pay for it, loading insurers with extra risk.

He said insurers did not agree with Poucher that this was discrimination.” Click here to read more

In other news

AA Insurance: AA Insurance is a finalist in 2020 Diversity Awards NZ

Southern Cross: Southern Cross celebrated Matariki

RBNZ: RBNZ announced that it will publish data from the Credit Conditions Survey for the June 2020 quarter on Tuesday 14 July. Usually run biannually in March and Sept, the Credit Conditions Survey asks banks qualitative questions about changes in credit conditions in bank lending markets. The RBNZ decided to conduct an interim Credit Conditions Survey for June 2020 to understand how domestic credit conditions have changed post-lockdown.

Cigna: David Haak has joined Cigna.


AMP sale finalised, and more daily news

The sale of AMP Life to Resolution Life has been finalised. The sale amounted to A$3 billion (NZ$3.19 billion), with A$2.5 billion being paid in cash and the remaining A$500 million being paid in equity interest in Resolution Life Australia. 

“The total sale proceeds are A$3 billion, comprising A$2.5 billion cash and A$500 million equity interest in Resolution Life Australia, a new Australian-domiciled, Resolution Life-controlled holding company that is now the owner of AMP Life.”

As a result of the sale, AMP will transfer an estimated A$55 billion in client funds as part of the company’s internal separation process. And although AMP will sell AMP Life, the company will be providing technology and administrative services to AMP Life for the next two years as part of a transitional services agreement.

“The separation of AMP Life will significantly simplify AMP’s group structure. The internal separation process included the transfer of approximately A$55 billion of client funds via several successor fund transfers.

 

Collectively these transfers represented one of the largest fund transfers of this kind and enables AMP to focus on its strategic simplification of its wealth management platforms and products.

 

In addition to its residual 20% holding in Resolution Life Australia, AMP will continue to provide technology and administrative services to AMP Life for a two-year period under a transitional services agreement. All customers’ terms and conditions will remain unchanged through the separation.” Click here to read more

Therese Singleton has been appointed CEO of the Resolution Life New Zealand Limited which has an A- financial stability rating from Standard and Poor's. 

 

In other news:

Kepa: Kepa are planning to hold two-day workshops for compliance support people in mid-sized to large adviser businesses in August, September and October

Fidelity Life: Fidelity Life launched Live in the Green, their July Sharecare challenge

nib: nibAPPLY offer extended until end of September

RBNZ: Monetary Policy dates for 2021

 


Upcoming changes to independent audit requirements and other daily news

Internal affairs have reported that Cabinet have agreed to introduce an amendment to the current AML/CFT Act on 31 December 2020. All reporting entities will be required to have an independent audit completed every three years instead of every two years.

Cabinet has agreed to introduce a new regulation to extend the default time frame for AML/CFT independent audits from two years to three years. The implementation of these regulations is the responsibility of the Ministry of Justice and until the new regulation comes into force reporting entities must comply with the current obligation to complete an independent audit every two years.”

As a result of the change in regulation, the following expectations have been set in place:

“The Ministry of Justice advises us that they propose to have the new regulation in force by 31 December 2020. This would mean: 

  • Law firms, conveyancers, and new Trust and Company Service Providers are required to have their first independent audit completed by 30 June 2020. i.e. no change to the current timing.
  • Accountants and bookkeepers are required to have their first independent audit completed by 30 September 2020. i.e. no change to the current timing.
  • Real estate agents’ first independent audit would not be due to be completed until 31 December 2021 i.e. the independent audit due date for real estate agents would be extended from 31 December 2020 to 31 December 2021.
  • For any reporting entity that has already completed its first or a subsequent independent audit when the new regulations are implemented, it will have three years from the date of the last independent audit to complete the next one.” Click here to read more Audit Guideline

In other news:

AIA: HealthScreen service has resumed

Privacy Bill: The Privacy Bill third reading was completed in Parliament under urgency in a continuation of the 24 June Parliamentary session, with the Act coming into effect on 1 Dec 2020. The NZ Herald reports the key provisions as:

  • Mandatory notification of harmful privacy breaches
  • Introduction of compliance orders
  • Binding access determinations - If an organisation or business refuses to make personal information available upon request, the Commissioner will have the power to demand release
  • Controls on the disclosure of information overseas
  • New criminal offences
  • Explicit application to businesses whether or not they have a legal or physical presence in New Zealand

Financial Advice NZ: Bring in the Experts: Disclosure Requirements with MBIE webinar

Southern Cross: Southern Cross supports new safe haven for at-risk pets

RBNZ: Reserve Bank welcomes new funding agreement


AMP Life sale, and more daily news

After yesterday’s announcement of RBNZ approving the sale of AMP Life to Resolution Life, some consumers raised concerns that the conditions of the sale won’t be enough to protect the interests of customers.

“There are fears the conditions the Reserve Bank (RBNZ) has put on the proposed sale of AMP Life to Bermuda-based private equity firm, Resolution Life, don’t go far enough to protect the interests of the insurer’s 200,000 New Zealand policyholders.”

One policyholder expressed his fears that the contract terms were general and that Resolution Life wouldn’t have an incentive to uphold goodwill if they don’t write new polices. As a result, claims and bonuses would be at risk of not being paid out.  

“The RBNZ’s general manager of financial stability, Geoff Bascand, said: "Because AMP Life is a branch of an Australian business and intended to be in ‘run-off’ and not write new business, special arrangements were needed for the security of New Zealand policyholders."

However, an AMP Life policyholder with a background in investment banking, Andrew Body, was concerned that without writing new policies, Resolution Life wouldn’t be incentivised to maintain goodwill in the market. Accordingly, he worried any claims and bonuses owed to policyholders could be put at risk.

While Resolution Life will be required to honour existing policies, Body said contract terms were often “very general” and relied on “trust”.”

I do not think this is realistic. The requirement for a trust and Policyholder Advisory Committee will provide a level of additional protection for policyholders, and reflects the kinds of governance requirements around conduct soon to be implemented across the sector, when new conduct law is eventually passed. The problem for AMP policyholders is a mirror of the problem for AMP. Long-term contracts make it hard for both parties. For the insurer, the clients you end up with on your books after 20, 30, or 40 years can have quite different characteristics to those you underwrote all those years ago. The situation for policyholders is that AMP has decided it would prefer not to be in the life insurance business. Resolution Life wants to be. Even though Resolution Life will not be writing new business, their investment will fail if they experience very high levels of lapses - the substantial existing premium and the price they paid to own it are both substantial stakes in the future of the book. 

Click here to read more

In other news:

Monetary Policy easing to continue

Financial Advice NZ: Consultation: Trusted Adviser Financial Advice New Zealand

FSC: proposed standard licence conditions for financial advice provider full licences


Deeper look into AIA Vitality Business and Community Grant, and more daily news

AIA announced their AIA Vitality Business and Community Grant earlier this month. The grant is set up to support adviser initiative to encourage health and wellbeing.  Advisers are able to find inspiration by referring to a national think tank that New Zealanders will be adding to. “To help inspire you with ideas to help create a healthier community, AIA will be asking New Zealanders to submit their ideas from 29 June.  This will create a national think tank which you can then use to inform your own ideas or to adapt for your submissions.”

There is a process for selecting successful applications, but those most likely to succeed will be increasing engagement within their communities through activities including:

  • “Hosting events to create awareness of health challenges in your community.
  • Investing in digital marketing and promotion of healthy living through podcasts or a video series.
  • Developing marketing activities that will drive the awareness of health and wellbeing in your community.
  • Delivering educational opportunities to increase the importance of health and wellbeing for New Zealanders.”

More details available here

In other news:

CFFC: The Commission for Financial Capability launched new resources to help students gain NCEA credits

RBNZ: The Reserve Bank resuming review of the Insurance (Prudential Supervision) Act 2010

AIA: how MIP works adviser resource


AMP sale gets the green light, and more daily news

After spending the past 18 months reviewing the sale proposal, the Reserve Bank announced that they have approved the sale of AMP Life to Resolution Life. Customers with existing policies with AMP Life will be unaffected by the transaction.

“The Reserve Bank has approved the proposed sale of AMP Life to Resolution Life, in a revised arrangement that is subject to a number of conditions imposed to protect policyholders.

The Reserve Bank has been reviewing the proposed transaction and consulting with the parties involved over the past 18 months to ensure the deal met our requirements, Deputy Governor and General Manager for Financial Stability Geoff Bascand says.”

For the sale to go ahead a Trust was established. This is to ensure objectives are met, industry dynamics are positive and that there is insolvency protection. Additionally, the Trust is set to ensure localisation. Capital and assets will be held in New Zealand and Resolution Life New Zealand (RLNZ) will be established.

“A bespoke trust model has been established that ensures supervisory objectives are better met, future industry dynamics are generally more positive, and there is additional protection in the event of insolvency - one of the key risk considerations that we have been seeking to mitigate,” Mr Bascand says.

The Trust is required to hold capital and assets in New Zealand that help provide long-term security for policyholder benefits or investments, where relevant. The Trust will be under the management and scrutiny of relevant officers in New Zealand, who have appropriate influence and authority in respect of the New Zealand operations, for the purpose of securing equity across all policyholders.

In addition, the model will see the establishment of a new, locally incorporated insurer Resolution Life New Zealand (RLNZ). The RLNZ board will have a majority of New Zealand resident, independent directors. RLNZ will act as Trustee to the Trust and will effectively manage the assets held in the Trust.”

In other news:

Kepa: Four Adviser Resource Centre Services were available to Kepa Members for free July – September

FSC Connect webinar - Customers, complaints and claims - what have we learnt from COVID-19?

FSC webinar: Compliance with Financial Advisers Act between now and March 31 2020

FSC webinar: Preparing contracts with authorised bodies, advisers, contractors and other staff or suppliers


Daily news update: Southern Cross report on member feedback and more stories

Southern Cross have reported that the feedback they received from members on the $50 million return has be positive. Additionally, it was reported that the credit return has been helpful.

Although helpful, Southern Cross have said that it is unlikely to happen again if we remain in Alert Level 1.

“Despite the significant chunk of savings made through April, Astwick says that as long as New Zealand stays at Alert Level 1, another giveback of a similar scale is unlikely – especially since the private health system was able to resume as early as Alert Level 3.” Click here to read more

In other news:

RBNZ: RBNZ released a statement supporting a worldwide multi-stakeholder appeal to keep and improve migrants’ access to remittance or money transfer services during the current economic crisis brought about by the COVID-19 pandemic.

FMA: FMA statement on director liability and continuous disclosure

FMA: Auditor Regulation and Oversight Plan 2020-2023

Alert Level 1: what have advisers learnt from lock-down?


Daily news update: RBNZ recommendations for Appointed Actuaries, and more stories

The Reserve Bank have released their thematic review of an Appointed Actuary role. The review was commissioned to better understand how the role works in practice. The review is presented in the form of a 55-page report that covers the role and scope of responsibility of Appointed Actuaries, regulatory requirements, insurer models, independence, conflicts of interest, expectations in a crisis, actuarial recommendations and advice, and engagement with the board, management, auditors and RBNZ. 

“The review, conducted by the Reserve Bank’s Industry Insights and Thematics team, was launched to better understand how the Appointed Actuary role works in practice for insurers, actuaries and the Reserve Bank, and to identify potential areas for improvement to make the role and regime more effective.

“The review concludes the regime and appointed actuary role are largely effective, but improvements can be made across the board – with the actuaries themselves, insurers and at the Reserve Bank. These improvements are important, and we will be working closely with the industry to support necessary changes,” Deputy Governor and General Manager for Financial Stability Geoff Bascand says.”

RBNZ outlined their expectations as well as identifying several areas that could be improved upon.

Key areas for improvement identified include:

  • Processes for appointments, absences, and reviews to continue with or replace the Appointed Actuary
  • Preparedness for the Appointed Actuary’s involvement in a crisis
  • Identifying and managing conflicts of interest
  • Clarity of delegations
  • Processes for following up recommendations in the Financial Condition Reports
  • Engagement between insurers’ boards and Appointed Actuaries
  • Engagement between the Reserve Bank and Appointed Actuaries
  • Guidance around the Reserve Bank’s expectations of the Appointed Actuary role, including explicit expectations regarding their independence and impartiality

Click here to read full report

In other news:

AIA: AIA Vitality members can donate their weekly AIA Vitality Active Benefit rewards to Trees that Count to plant native trees

RBNZ: Reserve Bank’s Expectations of Insurers and Appointed Actuaries

FSC webinar: 'Money & You - It's not about money, it's about you'


Daily news update: FMA lodges claims against ANZ, and more stories

The FMA has lodged claims against ANZ. The FMA has stated that ANZ charged customers credit card repayment insurance (CCRI) when in fact there was no cover provided for those customers. In June 2019 ANZ notified the FMA of some CCRI policies duplicates and issuing and failing to cancel CCRI policies for ineligible customers while charging premiums on those policies. These issues were identified by ANZ between May and June 2018.

“The Financial Markets Authority (FMA) has filed High Court proceedings against ANZ Bank New Zealand (ANZ), alleging the bank charged some customers for credit card repayment insurance (CCRI) policies that offered those customers no cover.

The FMA proceedings have two causes of action. Firstly, that ANZ issued duplicate CCRI policies to some customers, which provided no additional benefits or cover, and charged premiums on those policies, during the period April 2014 and November 2019. Secondly, ANZ issued and failed to cancel CCRI policies for ineligible customers, also charging premiums on those policies, during the period 1 April 2014 – May 2018. These two issues relate back to at least 2001. However, the FMA claim reflects the introduction of the Financial Markets Conduct Act 2013, which came into effect from April 2014.” Click here to read more

In other news:

RBNZ: RBNZ is set to work on South Pacific Remittances, Climate Change and their Te Ao Māori strategy.

RBNZ: RBNZ have acknowledged the efforts of the financial sector in meeting the needs of customers.

FMA: Time for financial advisers to step up on KiwiSaver


Daily news update: FMA investigate advice regarding KiwiSaver , and more stories

The FMA is looking into an adviser that recommended clients move savings into more conservative accounts during Level 4 lockdown. The FMA has stated that this advice could cause great damage to clients. Clients that accepted the advice provided in a mass email would have locked in the losses caused by the market volatility. As a result of the adviser’s actions, the FMA has reminded the public that they should consider all options before making any changes.

"The AFA sent a bulk email in March 2020 to clients urgently recommending they move their savings in KiwiSaver and other funds to less risky options.

The FMA was alerted to the communication after receiving a complaint from one of the adviser’s clients.

FMA head of supervision James Greig said the advice was inappropriate and had the potential for significant harm.

"The FMA has a low tolerance for poor conduct that poses risk to customers as a result of the Covid-19 crisis, especially because New Zealanders are looking for financial guidance at this time.” Click here to read more

In other news:

FMA: Providers working to help panicked switchers

PartnerRe: PartnerRe announces two new CEOs

Partners Life: New independent director at Partners Life

Is a brokerage no longer a “lifestyle” business?

Reserve Bank: Reserve Bank governor believes rates can go lower