Recent product database update

QPR database version 139 has been issued to subscribers and uploaded onto Quotemonster. This version includes the following changes:

  • Southern Cross - new policy wording effective 09/11/2020

                  - Addition of Chemo 100 and 300

                  - Rating changes applied

Remediation to:

  • Westpac - Trauma Accelerated - Diagnosis and Partial Benefit

Code Working Group provide insight into new code, and more daily news

Angus Dale-Jones, chairman of the Code Working Group, shared insights on the upcoming regulatory changes. Dale-Jones mentioned that the workload of advisers is going to change. Unlike the current regime, Dale-Jones noted that the new regime will not allow advisers to be easily let off the hook. Instead, Dale-Jones says in the new regime advisers will need to do more for their clients. Although all advisers need to adjust their service to meet the regulatory obligations, there will be scalability in provisions. Dale-Jones said that the code is designed around scalability, meaning that the effort and work advisers are expected to put in depends on the advice given. 

“To help advisers prepare, Good Returns talked to chairman of the Code Working Group Angus Dale-Jones who told us what changes are most vital for advisers to take note of.

Dale-Jones said that for many “the amount of work that the adviser is going to have to do will change”.

According to Dale-Jones this contrasts with the current system of class advice, which he believes has been too soft on advisers.

“Class advice [has] basically allowed advisers [to be] let off the hook. The current regime has encouraged advisers to do less for their clients. Which is not a good outcome for anybody including the advisers.”

But this will all change when the code of conduct comes into play on March 15, “The new regime holds that no matter how big or small you are, the code of conduct and the regulations apply. But, there is scalability in the provisions. If it is a very simple piece of advice, say advice on KiwiSaver, then you adjust your work accordingly. If you are doing full blown investment planning, then you would expect to see much more work around that.”

Scalability of advice is central to the code for Dale-Jones who says that, “The code and the legislation have been designed with scalability in mind. This isn’t as if we have switched the boundary. It means that whenever there is advice, the code applies. Advisers need to think very carefully as to how it applies.””

Dale-Jones also highlighted that FAPs will need to consider processes and procedures that advisers follow. Two code standards will become relevant to advisers in the new regime. Standard three and four weren’t previously requirements but are intended to protect clients. Dale-Jones has said that he is confident that much of the industry will handle the new standards with ease.

“It is not only the adviser that needs to be thinking carefully about the scope of their advice, the new regime and its focus on FAPs means that, “FAPs as the licence holders under this new regime, need to think about the processes and procedures that its advisers are going to have to follow in order to comply. It’s not all just on the shoulders of advisers.”

For advisers who have grown used to doing things the old way, Dale-Jones says that there are two key code standards that they will need to pay particular attention to.

“The two standards that have not been formal requirements previously are standards three and four. Standard three is to ‘give financial advice that is suitable’. So that means that the adviser needs to think about the circumstances of their client and consider what suitable advice means for them.

“Now there isn’t a code standard that applies to that in the class advice standards currently, but a person giving class advice who goes and tries to sell things against their client's interests is risking legal action. This code just makes it very clear that this is a standard that must be adhered to.

“Standard four is ‘ensure that the client understands the financial advice’. Now that standard asks advisers to put themselves in the shoes of the client to ask themselves: ‘Is this client vulnerable? Does this client have any understanding of financial matters? Do I need to explain things more to help the client understand?’

“Now this is something that a good practitioner should have been doing before anyway, but now there is a code standard that makes this a requirement so it becomes much easier for the regulator to say, ‘You did not do that, you don’t have a file note to demonstrate how you have done that, so you have not complied with the law.’ So the law has become far more precise in saying what needs to be done.”

With all the changes coming, Dale-Jones is confident that most of the industry will be able to handle the new standards with ease.” Click here to read more

In other news

Cigna: “Blue Star, our collateral provider, is in the process of upgrading their platforms which support the ordering process. To complete this they’ll be temporarily shutting down their online ordering portal on our Adviser Hub from 11am on Friday 4 December until 8am on Monday 7 December.

All emails regarding new business should still be sent to newbusiness@cigna.com, all other emails regarding existing business should be sent to customercarenz@cigna.com.”

BNZ: BNZ was warned by the Commerce Commission over responsible lending and disclosure failures

Southern Cross: Couple's $25,000 bill after cancer surgery only partly covered by Southern Cross


Southern Cross mental health programme, and more daily news

Southern Cross has reported that there is an increase in demand for a mental health programme targeted at school aged children. The Pause Breathe Smile programme became available for free in September to all New Zealand primary and intermediate schools. There has been increased demand for the programme since.  Southern Cross partnered with Pause Breathe Smile Trust and the Mental Health Foundation to fund the programme. Southern Cross spokesperson Joanne Mahon has said that Southern Cross is happy with the increased demand for the programme from schools and parents and is equally happy to be making a difference in the lives of children.

“Demand for a programme aimed at equipping school children with tools to navigate life’s ups and downs has more than doubled in the past three months.

Interest in Pause Breathe Smile with Southern Cross has increased significantly since September, when the programme was made available without cost for the first time to any primary or intermediate school in New Zealand.

First launched in 2013, the Pause Breathe Smile programme had already reached 65,000 kids before teaming up with Southern Cross.

New Zealand’s leading independent health and wellness provider, Southern Cross has joined forces with the Pause Breathe Smile Trust and the Mental Health Foundation to fund the programme.

Spokesperson Joanne Mahon said Southern Cross was delighted by the level of interest from teachers, schools and parents in New Zealand’s own locally designed and internationally recognised schools’ mindfulness programme.

“This increase in demand since the costs associated with participating in the programme were removed shows us there is huge appetite for a structured programme like this for schools.

“We wanted to support a programme that directly benefited our children and the fantastic uptake means we can start to make a real impact on the mind health of our kids.

 “We’re thrilled to be able to make a tangible difference for Kiwi kids as part of our commitment to helping to build a healthier future for all New Zealanders.”

Grant Rix, Director of Mindfulness Training and Development, has said Pause Breathe Smile is scaling up the team and the programme because of the anticipated and actual surge in demand.

“The Director of Mindfulness Training and Development for Pause Breathe Smile, Grant Rix, said that with financial barriers to schools participating in the programme now a thing of the past, the programme had been scaled up to meet demand.

“The last three months have been a game changer for us. If all the schools that have contacted us since September go ahead with bookings, we will double the number of schools we have reached in the past two and a half years before we teamed up with Southern Cross.

“We knew demand was likely to be high but it’s always difficult to gauge. Now we are building the team to scale up to meet this increased demand, which is a wonderful position to be in.”

In other news

From Insurance Business Mag: Insurance players should embrace a ‘hybrid’ digital model - expert


nib publish finding from parenting survey, and more daily news

nib has published the findings from its State of the Nation Parenting Survey. The survey looked into the concerns of parents in 2020. Behavioural issues was identified as the top health related concern. This concern was raised by 34% of all participants. While parents with young children reported that their biggest concern was children experiencing extensive episodes of irritability, anger and short-temperedness. Nathan Wallis, nib parenting expert, commented saying that the shift during lockdown added to an already emotional stage for toddlers. When discussing lockdown experiences, participants noted that prolonged negative behaviour were common occurrences.

“Leading health insurer, nib New Zealand, has released the findings from its second annual nib State of the Nation Parenting Survey, shedding light on the concerns that have been top of mind for Kiwi parents during a year unlike any other.

 

Behavioural issues are the number one health concern Kiwi parents have for their children, cited by more than a third (34%) of respondents, up 13% from 2019. Last year’s biggest health-related concern, sleep, still features prominently, as do stress levels and diet and exercise.

 

Taking a closer look at families’ lockdown experience, the number of respondents reporting sustained episodes of negative behaviour from their children (lasting two weeks or longer) grew significantly during the nationwide lockdown period. Concerningly, this increase has been largely sustained since lockdown ended.

 

Parents of younger children reported prolonged episodes of irritability, anger and short-temperedness as their biggest concern, while among parents of high schoolers, the sharpest increase came in levels of concern around changes to children’s motivation.

 

nib parenting expert, Nathan Wallis says, “Lockdown saw most families dealing with added stress as they adapted to new and novel experiences. Toddlers may in many ways have felt this most acutely as they are already in a very emotional stage of development - it’s called “Terrible Twos” for a reason. Toddlers are also just beginning to learn how to manage their emotions, so it’s mum and dad who have to do most of it for them. This was understandably compounded by lockdown, so many parents of toddlers had it quite hard.””

The study also found that parents struggled. Participants reported that their motivation, energy levels, and performance at work decreased during lockdown while feeling overwhelmed increased. Parents reported that their biggest source of stress was financial uncertainty which impacted 39% of participants. The study found that only 8% of participants didn’t feel any stress.  When discussing the future, 70% of participants reported that they felt positive and 67% believed that lockdown helped to solidify their family unit.

“The findings also clearly demonstrate the toll 2020 has taken on parents themselves. Lockdown saw sharp increases in the number of respondents suffering from decreased motivation, decreased energy levels, a sense of feeling overwhelmed, and declining performance at work. Any subsequent reduction since lockdown ended has been limited to just one or two percentage points.

 

The biggest source of stress reported by parents this year was financial uncertainty, impacting 39% of respondents – followed closely by the impact of COVID-19 on the world, general job-related stress and the economy. Fewer than one in 10 respondents (8%) reported not feeling any particular level of stress over this period.

 

For the 42% of respondents who saw their financial situation worsen due to COVID-19, the impact of this was reflected in general stress levels, and also felt in terms of quality of sleep and relationships.

 

Despite an undeniably tough year, it’s not all bad news. When asked about the outlook for their family, 70% of respondents reported feeling positive about the future and 67% believe lockdown strengthened their family unit, with many reporting a greater sense of happiness, and better communication as a result.”

 

Here is a list of the key findings: 

Parents’ biggest health-related concerns for their children:

·       Behavioural issues – 34% (up 13% from last year) 

·       Diet and exercise – 33% 

·       Sleep (lack of, too much, pattern changes) – 31% 

·       Stress levels – 31%

Biggest behavioural concerns, with episodes lasting two weeks or longer (as experienced pre-, during and post-lockdown): 

· Pre-school children – prolonged episodes of irritability, anger and short-temperedness. 

§  12% pre-lockdown, 28% during lockdown, 25% post-lockdown

· Primary and intermediate children – prolonged episodes of irritability, anger and short-temperedness. 

§  17% pre-lockdown, 32% during and 28% post-lockdown

·       High school children – prolonged episodes of decreased motivation. 

§  12% pre-lockdown, 37% during lockdown, 23% post-lockdown

 

Biggest personal impacts of lockdown – experienced by parents themselves: 

·       Decreased motivation – 13% pre lockdown, 29% during lockdown, 28% post-lockdown

·       Decreased energy – 14% pre-lockdown, 29% during lockdown, 30% post-lockdown

·       Feeling overwhelmed – 19% pre-lockdown, 33% during lockdown, 31% post-lockdown 

·       Declining performance at work – 5% pre-lockdown, 14% during lockdown, 13% post-lockdown

 

Parents’ biggest sources of personal stress: 

·       Financial uncertainty - 39% of respondents

·       The impact of COVID-19 on the world - 36%

·       General job-related stress - 34%

·       The economy - 34%

 

Impact of lockdown on family unit: 

·       Greatly strengthened family unit – 24%

·       Somewhat strengthened family unit – 43% 

·       Made no difference to family dynamics / relations – 28%

·       Somewhat weakened family unit – 4%

·       Greatly weakened family unit – 1%

 

Parents’ outlook for the future of their families: 

·       Very positive – 22%

·       Positive – 48% 

·       Neutral – 18%

·       Concerned – 2%

·       Extremely concerned – 2%

·       Don’t know / unsure – 8%

 

In other news: 

AIA: AIA Taking Small Steps campaign won Best Brand Campaign at Interactive Advertising Bureau awards

Southern Cross: Little heart monitor can be sent to patients in the mail, speeding up results

Southern Cross: New findings reveal we put higher pressure on ourselves than others

 


Southern Cross launches Cancer Cover Plus, and more daily news

Southern Cross has announced the launch of Cancer Cover Plus. The new cover is intended to give members broader chemotherapy options. Cancer Cover Plus will give members the option to upgrade to Chemotherapy 100, which has a benefit limit of $100,000 or Chemotherapy 300 which has a benefit limit of $300,000. Additionally, members will have the choice to access non-Pharmac cancer drugs.

“Southern Cross Health Insurance (SCHI) is launching competitive cancer care cover to give members more choice when it comes to chemotherapy, including increased access to cancer drugs not subsidised by Pharmac.

SCHI’s new Cancer Cover Plus has two optional upgrades - Chemotherapy 100 (benefit limit of $100,000) and Chemotherapy 300 (benefit limit of $300,000) – to help members during their cancer treatment journey. This covers the cost of Pharmac and non-Pharmac, Medsafe indicated chemotherapy drugs and their administration for the treatment of cancer.”

Nick Astwick has said that the new cover has been designed with the needs of members in mind. Cancer Cover Plus has been developed to complement the unlimited surgical and radiotherapy benefits. Astwick notes that the cover was created so more New Zealanders have faster and more access to affordable cancer treatment options.

“We understand that a cancer diagnosis, or the fear of one, can be scary for people so we wanted to give members peace of mind by providing them with more cancer cover options.

 

“We have developed them to complement the unlimited surgical and radiotherapy benefits we offer in most of our plans, and this will help to provide a comprehensive package to the vast majority of our members who have these products and also tell us their main concern is cancer care,” he said.

 

The Southern Cross Healthy Futures Report 2020 revealed that 79 per cent of New Zealanders are concerned about not having access to cancer treatment services and 59 per cent are worried about experiencing or developing an illness or disease.

 

“Not all cancer drugs are funded by Pharmac which makes them unaffordable for many people. We created this new cancer cover so Kiwis could have faster access and more treatment options to receive potentially lifesaving chemotherapy drugs if they need to,” said Astwick.” 

In other news:

At goodreturns: Adviser consultancy firms say full licensing provisions bring mandate for change

From Partners Life: Do your self-employed clients have the right income cover? 


Insurers set to pay assisted dying claims, and more daily news

Various insurers have confirmed that terminally ill customers who choose to undergo assisted dying will be eligible for claim payouts. Before the referendum AIA was the only insurer to state that it would pay if the referendum passed. Recently, Cigna has said that it would pay out if assisted dying became legal and customers decided to end their life. Jane Barron, Pinnacle Life spokeswoman, noted that customers with a terminal illness are entitled to claim if it has been stated by a doctor that they have 12 months or less to live; so those that would have an assisted death are already entitled to claim.

“AIA, New Zealand’s largest life insurance company, said it could still settle claims if ACT MP David Seymour’s End of Life Choice Act became law, but others were yet to settle on their stance at that time.

 

With preliminary figures from the Electoral Commission on Friday showing 65 per cent of New Zealanders voting in favour of the End of Life Choice Act, terminally ill adults with fewer than six months to live will be able to request assisted dying.

 

One of the life insurance companies contacted by Stuff this week, Cigna, said it would pay out if assisted dying became legal and policy holders took up the option of dying with assistance. Cigna chief executive Gail Costa said the End of Life Choice Act stated that a person who died as a result of assisted dying would be taken to have died as if assisted dying had not been provided, or have died from the terminal illness from which they suffered.

 

“Provided a policy holder who takes up the option of dying with assistance meets all terms and conditions, they will be entitled to claim.”

 

And Pinnacle Life spokeswoman Jane Barron said people with a terminal illness were entitled to claim on their Pinnacle life insurance policy if their doctor said they had 12 months or less to live.

 

“Therefore, anyone who is in the situation where they are considering an assisted death is already in a position to be able to make a claim.”” Click here to read more

Chatswood thinks it likely that all the providers of the best life cover will include payment on this basis, as they already make advance payments for terminal illness, which is decided on terms that probably include more cases that those envisaged by the End of Life Choice Act, based on modelling shared in our recent Quarterly Life and Health Sector review. 

 

In other news

FMA: FMA appointments reflect serious move into fintech space

Southern Cross: ProCare and Southern Cross join forces to enter virtual healthcare market

FSC: FSC Enjoys A Solid Year Of Growth Despite Challenges

Advisers Raise $12.5k For Fiordland Conservation Trust’s Kids Restore The Kepler


Medical insurance premium rates usually go up - but a few have gone down

In the most recent update to our medical premium comparison database (v83) we have the details of medical insurance premium rate changes by AIA and Southern Cross, both implemented on 1 November. Subscribers to the medical insurance premium comparison database will see that while AIA's increase is fairly uniform, the Southern Cross changes are more varied. One group of coverage has got cheaper, with a very small decrease. That was the rating for basic policies with no additional features (the most common example being specialists and tests). Even within this group for a few ages the premium rose, a few rates were very minor adjustments, but for a good slice of the most basic cover there was a small reduction in price. The reasons for the price change in this particular group will be explored in more detail in our Quarterly Life and Health Sector review, which we plan to have available to subscribers in the week before Christmas.  


Fidelity Life discuss up front commission changes, and more daily news

Fidelity Life chairman Brian Blake noted that the Government missed an opportunity to reduce life insurance policy commissions through CoFI. In a market that is highly competitive, Blake says that a voluntary reduction in upfront commission is unlikely, although Blake said that Fidelity Life is confident that it has adopted changes that meet guidelines. Fidelity Life is set to launch an online adviser product accreditation programme and an adviser quality assurance programme. Similarly, it has developed good customer outcomes principles to ensure compliance.

“Fidelity Life chairman Brian Blake says the government has missed an opportunity to force down commissions on life insurance policies.

Blake says: "The failure to address high upfront commissions in the Financial Markets (Conduct of Institutions) Amendment Bill was a missed opportunity in our view.

"In a highly competitive market like ours, without regulatory intervention it’s unlikely anyone will significantly reduce upfront commission levels and risk losing market share," he says in the company's annual report

He says Fidelity Life is confident it has adopted conduct and culture changes which meet the requirements of the Financial Markets Authority/Reserve Bank of New Zealand conduct and culture review.

The company will shortly be introducing an online adviser product accreditation programme, an adviser quality assurance programme and it has also developed good customer outcomes principles to help ensure Fidelity continues to meet the needs of its customers.

Further enhancements to its adviser proposition will be announced from early 2021, including some digital initiatives resulting from its Project Watson IT development.”

Although total comprehensive income and commission payments decreased, Fidelity Life experienced premium revenue increased. Fidelity Life has noted that it is looking to comply with RBNZ’s guidelines on prioritising capital protection. To comply, Fidelity Life would not be paying dividends this year.

“In the year to June 30, total comprehensive income fell from $20.7 million to $17.9 million. However, profit rose from $11.6 million to $17.0 million.

Insurance premium revenue increased from $275.47 million to $269.49 million and claims paid out rose from $125.7 million to $139.7 million.

However, commission payments fell from $57.37 million to $53.42 million.

The company’s earnings per share increased just over 10% from $8.73 to $9.62.

Fidelity says because the Reserve Bank has clearly advised all insurers that protecting capital should take priority over paying dividends, no dividend would be paid this year.

The Reserve Bank "expects insurers to take steps to protect, if not build, their capital positions to ensure the industry remains in a strong position to support New Zealanders through Covid-19 and this time of economic uncertainty."” Click here to read more

In other news:

FSC: Generations Digital Conference now available on demand

Southern Cross: Southern Cross have moved from Level 1 EY Building to Level 1 Te Kupenga, 155 Fanshawe Street

AMP: AMP receive buyout offer from US investment company

FMA: Consultation: Recognition of Australian adviser qualifications

Southern Cross: Hip replacements add to health insurer's bill


Fidelity Life appoints new CEO, and more daily news

Fidelity Life has announced the appointment of Melissa Cantell as the new CEO. Cantell is set to come into the role on 25 January 2021. Cantell will leave her current role as Chief Operating Officer at IAG NZ. Cantell has held various managerial roles and has experience in different areas of business. Until Cantell’s appointment, Simon Pennington and Adrian Riminton will continue as acting CEOs.

“Melissa Cantell has been appointed chief executive at Fidelity Life, replacing Nadine Tereora who left in May 2020.

Cantell has strong executive leadership experience running successful commercial operations across a range of industries. She joins us from IAG NZ where she held the role of Chief Operating Officer, and prior to that was the Executive General Manager Transformation.

She has accumulated a broad range of experiences over her career, from mergers and acquisitions strategy and business transformations to senior general management roles with Fonterra and Coca-Cola Amatil. She loves building great customer, adviser and people experiences, especially in times of change, and is passionate about the role insurance plays in the New Zealand community.” Click here to read more

In other news:

FSC: Understanding conflicts of interest and managing gifts and incentives webinar

Southern Cross: Travel Insurance: Are your clients failing to understand this insurance policy?

The role of a CEO in driving diversity and change


Science behind high Income Protection premiums, and more daily news

Recently we reported that Income Protection prices are on the rise as a result of the Australian market and COVID-19. New Zealander insurers are now being urged to amend processes and premiums before regulators intervene and introduction mandatory guides. Partners Life begun the conversation when revealing that it has increased IP premiums by 12% and made policy changes. Kris Ballantyne, chief marketing officer, has said that Partners wishes to offer affordable policies that customers can maintain for as long as they need. AIA and Cigna have both noted that they aren’t looking to introduce significant premium increases.  

“It took insurer Partners Life to break the silence last month when it revealed a brave plan to start publishing the content of discussions with the Financial Markets Authority.

 

In doing so, it revealed it lifted its income protection premiums by 12 per cent in the past year, and had made policy changes, including not allowing self-employed people to any longer select an “agreed value” of income to be covered, instead limiting cover to actual loss of earnings.

 

Partner’s Life’s chief marketing officer Kris Ballantyne said the company was a “first mover” on income protection, driven by wanting to provide policies they [consumers] could afford to keep as long as they needed it.

 

It was a big challenge as there were a lot of agreed value policies covering self-employed people, and owners of small businesses.

 

Neither of its two big rivals, AIA nor Cigna, was expecting to make such large premium increases, though AIA had stopped selling new policies in which the income covered automatically increased by 5 per cent a year.

 

AIA chief product officer Len Elikhis said that over time, “the insured’s benefits would creep up and approach the insured’s income”.

Shane Burdack, senior underwriting consultant as Swiss Re Australia highlighted that customers with significant wealth had very little incentive to return to work when on claim, resulting in increased premium prices.

“Swiss Re senior underwriting consultant in Australia, Shane Burdack, said that in New Zealand insurers gave little thought to the net wealth of policyholders.

 

Yet people with significant wealth – sometimes through investments, sometimes because of payouts from other insurance policies – had a low incentive to go back to work, and stayed “on claim” for longer driving up costs.” Click here to read more

  

In other news

nib: nib takes place among top 100 most diverse firms worldwide

Southern Cross: Southern Cross is offering members a $149 voucher when they join Snap Fitness on a minimum 12-month term

Southern Cross: Southern Cross is offering members 10% off the retail price of a monthly LES MILLS On Demand subscription