Chatswood serves the life and health insurance sector in New Zealand with market intelligence, data, and bespoke consulting services. Some of these are provided in conjunction with Quality Product Research Limited - a subsidiary that brings you Quotemonster.
We believe that good decisions are more likely to occur when we have good information about the market environment in which we operate. Intuitive leaps and creative decisions are always required, of course, but the more they are based on a firm foundation of observation, the better they tend to be.
Industry-relevant changes as new government is ushered in
With Labour soon to hand over control to a National and ACT led government (perhaps with support from NZ First), the question on everyone’s lips is what does this mean for our sector?
National have previously come out against the proposed Income Insurance Scheme, with Christopher Luxon calling the levies required to fund the scheme a ‘job tax’. One of National’s 100 day action plan pledges is to stop work on the so-called ‘job tax’. This change could be seen as a positive move as last year Risk Info NZ ran a poll with 80% of respondents not supporting the introduction of a state-backed income insurance scheme.
National promised to repeal the Conduct of Financial Institutions Act (CoFI), due to come into force in March 2025, which they’ve said “makes credit more expensive and harder to obtain even for basic services such as overdrafts and mortgages”. Meanwhile, Katrina Shanks, chief executive of Financial Advice NZ, has said it would be ‘preferable’ to tweak CoFI, rather than scrap it altogether, as the industry is very supportive of legislation that endorses good conduct and culture within the sector.
National has promised to roll back measures brought in by Labour including the Credit Contracts and Consumer Finance Act (CCCFA), with their rebuilding the economy plan saying they will “Cut financial red tape that is stifling investment, including significantly reducing the scope of the CCCFA which has restricted access to credit.”
National has said they will allow people to split their KiwiSaver between multiple providers, which they say will ‘drive innovation, boost competition and put downward pressure on fees’, though industry players have reservations around the complexity and added costs of doing this. Another tweak to the KiwiSaver scheme they have promised is allowing young people to use their retirement savings to pay a rental bond. Instead of tinkering with the scheme, the FSC is instead calling for a comprehensive review of KiwiSaver settings.
One of the agenda items on National’s 100 day action plan is to remove the Reserve Bank’s dual mandate (of managing inflation and supporting maximum sustainable employment) to get the RBNZ purely focused on getting inflation down to targeted levels.
From a health perspective, National’s 100 day action plan includes extending free breast cancer screening for women aged up to 74, from the current cutoff of 69 years of age. National have said they will allocate $280 million in ring-fenced funding to PHARMAC over four years to pay for 13 cancer treatments not currently funded in NZ. National have said they will deliver faster access to mental health services through their Mental Health Innovation Fund, which will initially see up to $20 million in matching funds distributed to community mental health organisations who are delivering strong results for Kiwis in need. They have pledged to extend free postnatal stays for mothers of newborn babies to three days and provide free continuous glucose monitors to type 1 diabetics aged under 18.
National’s five major targets for health will be:
· Shorter stays in emergency department – 95% of patients to be admitted, discharged or transferred from an emergency department within six hours.
· Faster cancer treatment – 85% of patients to receive cancer management within 31 days of the decision to treat.
· Improved immunisation – 95% of two-year-olds receiving their full age-appropriate immunisations.
· Shorter wait times for first specialist assessment – a meaningful reduction in the number of people waiting more than four months to see a specialist (target to be set in government).
· Shorter wait times for surgery – a meaningful reduction in the number of people waiting more than four months for surgery (target to be set in government).
To attract and retain more healthcare workers they have said they will incentivise more people to study nursing and midwifery with a bonding scheme that will pay their student loan for five years if they commit to working in New Zealand. They have said they will establish a relocation support scheme, offering up to 1000 qualified overseas nurses and midwives relocation grants worth up to $10,000 each to support their move to New Zealand. National have pledged to establish a third medical school at the University of Waikato, with satellite training centres in regional areas. They’ve also said they will increase the number of medical school placements at Auckland and Otago by a total of 50 per annum from 2025.
We will be closely following these proposals and will report back as and when things change.
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Legal and regulatory update for the life and health insurance sector
4 Cct 2023 - FMA #9: Ethical Investing – World Investor Week special with Paul Gregory https://www.fma.govt.nz/library/podcast/5-mins-with-fma-podcast-9-ethical-investing-world-investor-week-special/
9 Oct 2023 - The ASIC Annual Forum is on 21–22 November 2023 in Melbourne. Early bird tickets are available now. https://asic.gov.au/about-asic/news-centre/news-items/asic-annual-forum-2023-last-chance-for-early-bird-pricing/
10 Oct 2023 - The Australian Prudential Regulation Authority (APRA) has issued a letter to all registrable superannuation entity (RSE) licensees on the revocation of superannuation standards. https://www.apra.gov.au/news-and-publications/apra-releases-letter-on-revocation-of-superannuation-standards-0
10 Oct 2023 - ASIC has made ASIC Corporations (Financial Reporting by Stapled Entities) Instrument 2023/673. The instrument continues the relief previously provided under ASIC Class Order [CO 13/1050] Financial reporting by stapled entities, which was subject to sunsetting on 1 October 2023. https://asic.gov.au/about-asic/news-centre/news-items/asic-remakes-financial-reporting-legislative-instrument/
10 Oct 2023 - ASIC has made ASIC Credit (Amendment) Instrument 2023/675, which extends the operation of ASIC Credit (Electronic Precontractual Disclosure) Instrument 2020/835 for a temporary period of 12 months until 1 October 2024, pending law reform. https://asic.gov.au/about-asic/news-centre/news-items/asic-extends-electronic-precontractual-disclosure-legislative-instrument/
10 Oct 2023 - Minister of Finance, Hon Grant Robertson, September 2023 diary released with no potential financial services sector related meetings noted. https://www.beehive.govt.nz/sites/default/files/2023-10/Ministerial%20Diary%20September%202023.pdf
10 Oct 2023 - The Quarterly Statement by the Council of Financial Regulators – October 2023 has been released. The Council discussed the current regulatory approach to protecting New Zealanders from financial scams, the regulatory approach to the credit unions and building societies sector, the Council’s coordinated approach to improving financial inclusion, and how the Council could better achieve and measure success in terms of its legislative mandate and the principles of good regulatory stewardship. https://www.cofr.govt.nz/news-and-publications/quarterly-statement-by-cofr-october-2023.html
11 Oct 2023 - The Australian Prudential Regulation Authority (APRA) has published four new updated frequently asked questions (FAQs) on the Australian Accounting Standards Board (AASB17) collections. https://www.apra.gov.au/news-and-publications/apra-publishes-aasb17-updates-to-insurance-frequently-asked-questions
12 Oct 2023 - The Reserve Bank of New Zealand published its Annual Report covering the year from 1 July 2022 to 30 June 2023. https://www.rbnz.govt.nz/hub/news/2023/10/rbnz-releases-annual-report-2023
Legal and regulatory update for the life and health insurance sector
26 Sep 2023 - The Federal Court of Australia has ordered ANZ to pay a $15 million penalty after it admitted to misleading customers as to the funds available to those consumers in certain credit card accounts. https://asic.gov.au/about-asic/news-centre/find-a-media-release/2023-releases/23-260mr-anz-penalised-15-million-for-misleading-customers-about-available-funds/
27 Sep 2023 - The Reserve Bank of New Zealand – Te Pūtea Matua has launched the final policy consultation on the review of the Insurance (Prudential Supervision) Act (IPSA) 2010 https://www.rbnz.govt.nz/hub/news/2023/09/ipsa-consultation
Wotton + Kearney release 2023 NZ Insurance Market Trends Update
Wotton + Kearney have released their 2023 NZ Insurance Market Trends Update. Of note, it includes updates on:
· increase in director accountability for ESG issues and climate-related financial disclosures;
· how organisations will need to consider how applicable tikanga values should inform their conduct when dealing with employment relationship issues;
· how organisations need rigorous processes in place for restructures and redundancies;
· extensions to Schedule 2 Occupational Diseases;
· changes to the regulation of medicines, medical devices and natural health products;
· the passing of the Therapeutic Products Bill 2023;
· cyber, privacy and data security.
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Legal and regulatory update for the life and health insurance sector
30 Aug 2023 - Chapter Zero says New Zealand needs to have credible net zero sector transition pathways https://www.chapterzero.nz/news/a-clear-path-to-decarbonisation-investment/
31 Aug 2023 - First reading of the Employment Relations (Protection for Kiwisaver Members) Amendment Bill completed in parliament, referred to the Finance and Expenditure Select Committee, with report back by 29 Feb 2024 https://bills.parliament.nz/v/6/bc7acd0f-efd4-4d6b-c045-08db67c4d76d?Tab=history
31 Aug 2023 - The Digital Services Tax Bill was introduced to parliament. This bill would allow the Government to implement a digital services tax https://bills.parliament.nz/v/6/7e81f14d-0dbd-42b7-2088-08dba9b9dfac?Tab=history
The Companies (Directors Duties) Amendment Act 2023 is now law
The controversial Companies (Directors Duties) Amendment Act 2023 took effect on 7 August 2023. The Act adds an additional section to clarify section 131 of the Companies Act 1993, saying that directors may consider a wide number of factors other than financial gain while making decisions.
The original bill listed five non-exhaustive environmental, social and governance (ESG) factors:
(a) recognising the principles of the Treaty of Waitangi (Te Tiriti o Waitangi);
(b) reducing adverse environmental impacts;
(c) upholding high standards of ethical behaviour;
(d) following fair and equitable employment practices; and
(e) recognising the interests of the wider community.
However, the select committee removed the reference to the ESG factors and the final wording is “To avoid doubt, in considering the best interests of a company or holding company for the purposes of this section, a director may consider matters other than the maximisation of profit (for example, environmental, social, and governance matters).”
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Ultra-Processed Foods and their negative impact on health
Ultra-processed foods (UPFs) are getting a (deservedly) bad rap. Often high in fats, sugar and/or salt, they are energy-dense and nutrient-poor. They have generally undergone intense processes (like high-temperature extrusion or hydrogenation) and usually contain food additives and/or industrial ingredients like colours, artificial flavours, emulsifiers and preservatives. If you don’t recognise some of the ingredients on the label as food, then it’s likely to be an UPF. They are manufactured to be cheap, convenient and have a long shelf life.
They’re ubiquitous in our food chains. Walk the aisles of your local supermarket and so much of what is on the shelves can be considered a UPF. They can be foods mistakenly considered healthy (flavoured yoghurts, cereals) to products we all know aren’t good for us (here’s looking at you, fizzy drinks and frozen pizza). Some estimates have found more than half our diet is now composed of UPFs.
During a cost of living crisis, UPFs can often be a cheap, quick way of filling bellies – not everyone can afford to avoid them or has the time to cook meals from scratch every day.
So why should we limit our intake of UPFs?
In a 2020 review of 43 studies on UPF consumption and health outcomes, 37 studies found at least one adverse health outcome. There’s increasing evidence linking UPF intake and chronic conditions, in particular obesity, but also cancer and depressive symptoms. Studies have found that people who consume more UPFs have higher risks of cardiovascular disease, coronary heart disease, and cerebrovascular disease. Studies following large groups have worrying conclusions
2019 BMJ study of more than 105,000 people followed for five years found that for every 10% increase in the amount of ultra-processed foods participants ate, their risk of heart attack or stroke went up by 12%. And another 2019 BMJ study, this one involving almost 20,000 people followed for 10 years on average, found that participants who ate more than four servings of ultra-processed foods per day had a 62% higher risk of dying during the study (from any cause) compared with those who ate two servings per day.
There’s evidence that UPFs are very addictive. They’re engineered to be hyper-palatable so you want to eat more of them. Vast amounts of money are spent by food manufacturers, fine-tuning formulations to find the best taste. Research has found some UPFs can elicit cravings, loss of control and an inability to cut back. There’s also increasing evidence that a diet high in UPFs leads to increased energy intake and weight gain.
Even the packaging can be a concern, with one study finding higher consumers of UPF had higher urinary concentrations of phthalates and bisphenols that may have migrated from the food packaging.
With UPFs being compared to other public health crises like tobacco and opioids, some groups are calling for public health interventions that go beyond education, saying that UPFs meet the criteria requiring regulation – abuse, toxicity, ubiquity and externalities (how does your consumption affect me?).
My pick is we’re going to start seeing more backlash against UPFs as more research showing how bad they are for us comes out.
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Legal and regulatory update for the life and health insurance sector
2 Aug 2023 - APRA has released for consultation its proposed amendments to three private health insurance (PHI) reporting standards, following amendments to PHI legislation. https://www.apra.gov.au/news-and-publications/apra-consults-on-amendments-to-private-health-insurance-reporting-standards
3 Aug 2023 - Medicines (Exemption for Authorised Prescribers) Amendment Bill was introduced at Parliament https://bills.parliament.nz/v/6/ece4ff52-30c7-4c5a-1874-08db93c62d99?Tab=history
Legal and regulatory update for the life and health insurance sector
20 Jul 2023 - The Australian Prudential Regulation Authority (APRA) has released its annual Private Health Insurance Coverage Survey, which provides a snapshot at December each year of the number of people, by age, gender and state of residence, with hospital insurance, for the December 2022 reference period. https://www.apra.gov.au/private-health-insurance-annual-coverage-survey
20 Jul 2023 -The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have released key materials for consultation, to support the implementation of the Financial Accountability Regime (FAR) by the financial services industry.
The FAR will impose a strengthened responsibility and accountability framework for APRA-regulated entities in the banking, insurance and superannuation industries and their directors and most senior and influential executives. In doing so, it is designed to improve the risk and governance cultures of those financial institutions. The closing date for submissions is 17 August 2023. https://asic.gov.au/about-asic/news-centre/find-a-media-release/2023-releases/23-194mr-apra-and-asic-commence-early-consultation-on-far/
21 Jul 2023 - The Reserve Bank of New Zealand - Te Pūtea Matua has released the dates for publication of its quarterly Monetary Policy Statement (MPS), Monetary Policy Review (MPR) decisions and the six-monthly Financial Stability Report (FSR). The new dates cover the period from February 2025 to July 2025. https://www.rbnz.govt.nz/hub/news/2023/07/monetary-policy-announcement-and-financial-stability-report-dates
24 Jul 2023 - The Therapeutic Products Bill receives royal assent https://bills.parliament.nz/v/6/e52e16e3-0427-4372-a650-4eb655b4c440?Tab=history
25 Jul 2023 - From today the Financial Markets Authority will begin accepting licensing applications for financial institution licences under the Conduct of Financial Institutions (CoFI) regime. Under CoFI, which comes into force on 31 March 2025, about 100 registered banks, licensed insurers, and licensed non-bank deposit takers such as credit unions will need to be licensed by the FMA to provide financial services to consumers. https://www.fma.govt.nz/news/all-releases/media-releases/cofi-licensing-begins/
Legal and regulatory update for the life and health insurance sector
17 Jul 2023 - The Australian Prudential Regulation Authority (APRA) has finalised a new prudential standard aimed at ensuring banks, insurers and superannuation trustees can better manage operational risks and respond to business disruptions. https://www.apra.gov.au/news-and-publications/apra-finalises-new-prudential-standard-on-operational-risk
18 Jul 2023 - The FMA has released its scenario analysis information sheet to help climate reporting entities (CREs) meet their obligations under the Climate-Related Disclosures (CRD) regime. It sets out how the FMA will apply the CRD framework relating to scenario analysis; what the FMA will look for when determining compliance with those standards; and other considerations that may help CREs ensure they meet the disclosure requirements. https://www.fma.govt.nz/news/all-releases/media-releases/scenario-analysis-information-sheet-for-climate-related-disclosures-regime/
18 Jul 2023 -The Australian Securities and Investments Commission (ASIC) has written to the Insurance Council of Australia, the Council of Australian Life Insurers and the Financial Services Council about its review of over 100 Target Market Determinations (TMDs) for general and life insurance products.The letters outline ASIC’s findings based on a sample of general and life insurance products. ASIC considered that the products reviewed represent higher risk and/or potential for poor value to consumers. https://asic.gov.au/about-asic/news-centre/news-items/asic-review-of-insurance-target-market-determinations/
19 Jul 2023 - The Therapeutic Products Bill was read a third time and passed through under urgency https://www.beehive.govt.nz/release/new-era-therapeutic-products-regulation