Free cover for customer in financial stress

In a previous quarterly report we highlighted the case of Ms Earea, after having seen the story published in Stuff. Stuff has now published a follow-up to the story, as Westpac Life has waived her premium payments:

“After Earea’s story featured on Stuff, Westpac Life wrote to her to tell her: “No further premium payments will be required from you.”

“We are concerned that you have been making difficult decisions that involve personal sacrifice,” the letter said.

Earea had a $280,000 terminal illness claim declined by Westpac Life last year, with the insurer deciding her medical condition did not meet the criteria under her policy as it was not a condition the insurer believed would result in her death within 12 months.”

“Westpac Life is standing by its decision to turn down the claim, though Earea has sought legal advice and intends to challenge that.

Earea took her case to the Banking Ombudsman, which found the insurer had a right to decline the claim.”

This is a generous decision by Westpac Life which allows Ms Earea to retain the cover which she was finding difficult to afford. The dispute about the claim may be ongoing. We only have the information in the two Stuff stories to consider, so it would be unwise to comment more on that. In general terms, however, insurers asked for claims on compassionate grounds also consider their duties to other policyholders to only pay claims that meet the product terms and conditions. 

Click here to read more


Financial Advice weigh in on disclosure regulations, and more daily news

Financial Advice New Zealand have voiced their approval of the new disclosure regulations that were announced by MBIE on 25 June 2020. Katrina Shanks has said that new regulations mirror what Financial Advice outlined in their CoFI submission.

“Financial Advice NZ chief executive Katrina Shanks said the new rules had picked up many of the points made in the association's submission.

“The focus of the sector during this process was to ensure the right balance between good consumer outcomes and a financial advice sector which isn’t encumbered by unreasonable red tape and adverse outcomes.

“We support regulations around disclosure made to clients – including on conflicts of interest, commissions and other incentives and disciplinary issues.”

The need for disclosure being limited to adviser fees, the products they offer advice on, their conflicts of interest, commission they receive, and how clients can contact dispute resolution services is something Financial Advice is please about.

““However, we are pleased to see a change from the draft disclosure requirements that now only requires disclosure of these matters when they would likely materially influence a client’s decision. This is something we strongly recommended in our submission to ensure disclosures were meaningful and not overwhelming for consumers.

“We were concerned the draft regulations required disclosure of product fees charged by unrelated third parties (e.g. insurance premiums) so the removal of the requirement to disclose fees for ‘acting on the advice’ was a sensible move."” Click here to read more

In other news:

FSC: FSC 2020 Awards - Nominations Open

FMA: FMA takes CLSAP NZ to court over alleged anti-laundering breaches

Westpac: Westpac to launch carbon footprint tracker

BNZ: BNZ launches banking support for domestic, economic abuse survivors


Westpac's strategic refocus and environmental commitment

At times like this, it is not uncommon for businesses to consider strategic restructuring. This has been the case for Westpac, who are considering redirecting their attention and resources to their core products. Group CEO Peter King has stated that Westpac is also committed to the Paris Agreement and is looking to reduce carbon emissions.

"Westpac is open to selling its general and life insurance businesses as the lender looks to put in more resources to rebuild its core banking operations.

 

The banking group revealed the possible divestment plan today in its half-year financial results, which show cash earnings tanking by 70% from a year earlier to $993 million and statutory net profit slumping 62% to $1.19 billion.

 

Westpac blames the poor results on the fallout from the virus pandemic disruption and impairment charges for a money laundering scandal.

 

Group CEO Peter King says the insurance units and other non-core operations such as superannuation will be moved to a new Specialist Businesses division with a strategic review of their future to follow in coming months." Click here to read more

In other news:

Instant Finance: Former AIA head of sales and distribution joins Instant Finance

Tower: Familiar face moves into general insurance

Asteron Life: Tech adoption a pandemic positive: Hill

NZ Funds: NZ Funds picks up Partners software


Recent Product Updates

We have just uploaded the Quality Product Research Limited database QPRV10.1 to Quotemonster and subscribers. This version included the following changes:

ANZ Trauma Cover:

Policy wording also updated to the most recent document in the database, standalone cover.

ASB Mortgage Protection Review:

Review & change made to Offsets / Mental Health Limitation / Partial Disability provisions

Asteron Life

Enhancements of Trauma, TPD & Mortgage Protection for Business and Personal  products (effective 19 June 2017)

Kiwibank Mortgage Protection Cover:

Product has been rated & policy wording uploaded to database

Westpac Trauma (accelerated only)

New score added under ‘Diagnosis & Partial benefit’ to capture ‘minor heart attack’

Sovereign Critical Illness 

Updated pricing is being tested and will be applied to Quotemonster by tomorrow morning. The policy wording for these product enhancements has not yet been reviewed and will be reviewed and updated by 26 June, the QPR database will be updated again during that week. 

 

 


Banks: Mortgage Repayment Cover

We recently had an adviser ask us this question: 

If you are on claim with a bank mortgage cover and your mortgage is repaid during your claim does the claim end before you get to the end of the claim term?

Here is what we found:

ASB – Mortgage and Income Protection, benefit continues after mortgage has been repaid until the end of the chosen payment term.

Westpac – payments will cease if the mortgage is repaid. If disabled after the maximum 30 months and the life assured meets the TPD definition, Westpac will repay the outstanding loan amount. The policy then ceases.

Other banks have either Income based products, or an Agreed Value with a chosen benefit amount (Living Expenses).


Bank Insurers Argue Against "Sales" vs "Advice" Distinction

David Chaplin reports: 

"Banks have mounted an all-out attack on Financial Advisers Act (FAA) reform proposals to clearly distinguish ‘sales’ from ‘advice’ setting themselves at odds with industry bodies and consumers."

and also adds for clarity that

"...the big four Australian-owned banks and Kiwibank all strongly argue against introducing a formal distinction between ‘salesperson’ and ‘financial adviser’ into the regulatory mix."

Those a pretty strong words from David. I was interested in how we know that consumers would like a clearer distinction, and you might be too: 

"An accompanying MBIE survey also found almost 90 per cent of consumers said “clarifying the difference between ‘sales’ and ‘financial advice’ would help them better understand what they are receiving”

Read the balance of the article at this link


Why Can't I see the Banks on Quotemonster

There are a number of reasons why you may not be able to see the banks on Quotemonster or in the pdf reports.

  1. We don't offer the premiums for the banks on Quotemonster and therefore you will only be able to view banks if you subscribe to QPR.

If you are using QPR and can still not view the banks it may be due to either of these:

  1. The banks may not offer the product or options that you are quoting on. For example, a number of the banks do not offer Standalone products, they only offer Accelerated so please ensure the banks offer the products you are quoting.
  2. You have to ensure that you select the banks in "Step 3: Compare Insurers" in the "Research" tab. There is a drop down box labeled "Select More Companies" which lets you select which companies you want to appear on your report. Make sure you select the banks here and click 'Save'.

If you are still having issues please feel free to contact us on (09) 480 6071.