Fidelity Life to hold Practice Manager / Administrator summits

Fidelity Life have announced they will be holding their inaugural practice manager/administrator summits in February 2024. These summits are targeted at support staff that play a critical role in driving success at adviser businesses. They will cover topics such as working together, process and system design and what’s coming up from Fidelity Life. There are three summits across the country.

Christchuch: Tuesday 13 February 2024

Wellington: Wednesday 21 February 2024

Auckland: Wednesday 28 February 2024

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Feedback sought on draft version of revised entry-level qualification for financial advisers

FSC cancel Trans Tasman Strategic Leaders Summit

In Australia, Health Minister rejects health insurance industry’s request to deliver 6pc premium rise

EMA sees demand for restructuring and redundancy support up by almost 50% as businesses responded to economic slowdown

A year in review

2023 has been a difficult year for consumers and businesses alike. Conditions are similar to last year, with inflation remaining high, resulting in a continuing cost-of-living crisis, the OCR set at 5.5% and the RBNZ not ruling out a further hike next year, and housing prices only just starting to rise. How has that affected the insurance sector? Combined with an increase in regulatory red-tape tangling up banks, there has been a spike in lapse rates that very much looks like it is driven by the same forces.

NZ was badly affected by natural disasters this year, with insurers having to fork out $3.5 billion in general insurance claims for the Auckland Anniversary Weekend floods and Cyclone Gabrielle. Such heavy claims have impacted general insurers, perhaps part of the reason why Tower is looking to do a strategic review of its ownership structure.

It is this situation which greets the new National-Act-NZ First coalition government. They  have outlined a 100-day plan that includes: stopping work on the Income Insurance Scheme; introducing legislation to narrow the Reserve Bank’s mandate to price stability (removing the mandate to ensure maximum sustainable employment); signing a memorandum of understanding with Waikato University to progress a third medical school; disestablishing the Māori Health Authority; taking the first steps to extend free breast cancer screening to those aged up to 74; repealing amendments to the Smokefree Environments and Regulated Products Act 1990 and regulations; and setting five major targets for the health system. National promised to roll back the Credit Contracts and Consumer Finance Act (CCCFA) and to make changes to allow kiwis to split their KiwiSaver savings between different providers during the election campaign, so we will be watching how this plays out next year. In August, then National Party Leader, Chris Luxon, told the Financial Services Council conference that it was also their intention to repeal the Financial Markets (Conduct of Institutions) Amendment Act 2022. That hasn’t explicitly made it into the coalition agreement, but may possibly be covered by the planned regulation sector reviews to which the coalition commits under the Act Policy Programme. Although regulatory relief is often welcomed by the sector, so is long-term stability, so we have found views split on the proposed changes to the conduct law.

As of March 2023, all financial advice providers needed to have obtained their level 5 certificates to continue operating this year. We wrote about the impact of this on the market and just how many financial advice providers and financial advisers there are in the September 2023 Quarterly Life and Health Sector Report.

Accuro and Unimed members voted in favour of combining operations. Approval from the Reserve Bank of New Zealand is likely to come early next year. The Lifetime Group acquired Protection Solutions. Fidelity Insurance, formerly known as Westpac Life, was integrated into the Fidelity Life Assurance Company. In March 2023 Cigna NZ changed its name to Chubb Life Insurance New Zealand Limited (Chubb Life NZ) and is now trading under the Chubb brand. nib have told customers they are planning to amalgamate, with their health insurance company ‘nib nz limited’ and their life and living insurance company ‘nib nz insurance limited’ combining to form one single company known as nib nz limited. The acquisition of Partners Life by Dai-Ichi has been made more real by the appointment of new personnel and the announcement of Naomi Ballantyne’s change of role to come in 2024.  The Association of Financial Advisers (AFA) and the Financial Planning Association of Australia (FPA) have announced they will merge to form the Financial Advice Association of Australia. The Australian Competition & Consumer Commission (ACCC) denied the sale of Suncorp Bank to Australia and New Zealand Banking Group (ANZ).

There were some interesting court cases, with AMP settling with Australian advisers for A$100 million; MAS were penalised $2.1 million for making false and misleading representations to customers; Cigna was fined $3.575m for false and/or misleading representations.

There were lots of new faces joining the industry or changing roles this year.

• AIA New Zealand appointed Michele Embling as an independent non-executive Director; Ben Lovelock as Chief Risk Officer; Shaun Baird as Chief Financial Officer; Maddie Sherlock as Head of Customer Operations; Andrew Anisi as Senior Manager Contact Centre & Business Solutions; Aaron Gilmore and Katie Hunter as AIA Vitality Coaches; Calvin Romeo to the role of head of ASB Partnership.

• Asteron Life appointed Kirsten Young as the National Manager Adviser Distribution.

• Chubb Life board chairman Steven Fyfe retired and Paul Brock took over his role as Chairman while Linley Wood joined as an Independent Director to the board. Chubb appointed Monique Ravening as its new Head of Underwriting and Erica Hamer as Chubb's new Wellington-based Business Partnership Manager. Adit Witjaksono was appointed as property manager for Australia and New Zealand.

• Fidelity Life made some new appointments to key roles.  David Winspear was appointed as Head of Channel Strategy, Michelle Doyle appointed as the new Head of Solutions and Kylie Oldham appointed as Senior Group Insurance Business Manager.  Leigh Bennett was promoted internally to the role of Head of Underwriting and Mat Bark was appointed as Head of Channel Enablement. Giselle Baker was appointed as Head of Data and Analytics. In October, Ian Clancy acted as the Acting CEO until Campbell Mitchell was bought on board as the new CEO after Melissa Cantell resigned. Sam Kelly was appointed as Head of Regulatory Affairs.

• MAS appointed Matt Harvey as Chief Distribution and Marketing Officer, Craig Ward as Chief Innovation and Digital Officer, Dan Mead as an Investment Manager.

• nib appointed Stu Crowther as new National Manager – Adviser Distribution; Ian Sargeant as National Manager – Group, Partnerships & Strategy; Chris Carnall as Head of Distribution; Stan Bennetto as Group Health Business Development Manager.

• Partners Life appointed Gemma Vivian as GM Adviser Engagement; Gareth Allen as Senior Manager Adviser Partnerships. Naomi Ballantyne announced her retirement from Partners Life in March 2024.

• Southern Cross Healthcare appointed Mark Phillips as Chief Digital Officer; Dr Erica Whineray Kelly as Transformation Lead for Women’s Health; Jo Fair as Chief of People & Culture; Monica Goldwater as Chief Nursing Officer.

• Suncorp New Zealand appointed Suraiya Phillimore-Smith as its new Chief Customer Officer. Lindsay Tanner was appointed as an independent director of the firm’s three boards.

• Justine Gilliland was appointed to Unimed's board.

• ASB appointed Carl Ferguson Chief Financial Officer and Rebecca James as its new Executive General Manager of Business Banking.

• Westpac welcomed a new GM of Consumer Banking and Wealth, Michael Norfolk.

• Kiwibank appointed Julia Jack as chief purpose and brand officer.

• TSB appointed Kerry Boielle as new CEO after Donna Cooper resigned. Penny Burgess was appointed General Manager Customer Delivery; Molly Auva'a-O'Brien as General Manager Operational Excellence.

• AMP appointed Blair Vernon as CFO.

• Tim Grafton announced he’s stepping down as chief of the Insurance Council of New Zealand next year.

• Tony Dench started as Financial Advice NZ’s interim CEO following Katrina Shanks’ departure to head up The Australian and New Zealand Institute of Insurance and Finance (ANZIIF). Sonja Barrett was appointed as Financial Advice New Zealand’s Board Member Director (Risk) and Peter Fa’afiu was appointed as an Independent Member Director on the Financial Advice NZ Board. Stefanos Boulieris joined Financial Advice NZ, communicating online webinars and the upcoming conference in 2024 and Sarah Maxwell joined as Communications and Social Media Manager.

• Tim Tez and Sarah Phillips joined ANZIIF’s Board of Directors.

• Anna Scott, Ana-Marie Lockyer and Campbell Mitchell all joined the board of the Financial Services Council (FSC). David Bishop was appointed to the Chief Marketing Officer role.

• The FMA appointed Daniel Trinder as Executive Director – Strategy and Design; Michael Hewes as Director for Deposit Taking, Insurance and Advice; John Horner as Director of Markets, Investors and Reporting; Peter Taylor as Director Specialist Supervision and Response; Stuart Johnson as Chief Economist; Sharon Thompson as Executive Director – Transformation and Operational Delivery.

• Graeme Edwards took on the role of Lifetime Group director and chairman and David Haintz was appointed as an independent chairman of Lifetime Group Holdings and its subsidiaries.

• Craig Wagstaff joined New Zealand Home Loans (NZHL) as its new general manager for franchise, distribution, and marketing.

• The Adviser Platform (TAP) appointed Pooja Shetty as Senior Operations Specialist and Naz Mistry as a Compliance Specialist and Adviser Support.

• Some big names in the industry have retired, with David Haak, Tony Arthur, and our very own Rob Dowler retiring

Here’s to another exciting year in 2024!

Legal and regulatory update for the life and health insurance sector

21 Nov 2023 - The Australian Prudential Regulation Authority (APRA) has released its Quarterly Superannuation Performance publication and the Quarterly MySuper Statistics report for the September 2023 quarter.  https://www.apra.gov.au/news-and-publications/apra-releases-superannuation-statistics-for-september-2023

21 Nov 2023 - The Financial Services Council has today released its initial report outlining the challenge to update the permitted operating model for defined benefit (DB) workplace savings schemes by enabling them to consolidate, thereby benefiting both members and employer sponsors through improved cost-effectiveness and simpler administration. https://blog.fsc.org.nz/media-release-21-november-2023

22 Nov 2023 - The Australian Prudential Regulation Authority has released its quarterly private health insurance (PHI) publication for the September 2023 quarter. https://www.apra.gov.au/news-and-publications/apra-releases-quarterly-private-health-insurance-statistics-for-september-5

22 Nov 2023 - The Australian Prudential Regulation Authority (APRA) has released a response to consultation on 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-responds-to-consultation-on-amendments-to-private-health-insurance

23 Nov 2023 - The Privacy Commissioner has announced that his Office will be consulting on new rules specifically for biometrics. Biometrics are increasingly collected by facial recognition technology (FRT), retinal scans, and voice recognition. The exposure draft will be released early in 2024 and will be available for everyone to comment on. https://privacy.org.nz/publications/statements-media-releases/privacy-commissioner-to-consult-on-new-rules-for-biometrics/

24 Nov 2023 - FMA released its Audit Quality Monitoring Report for 2022/23 https://www.fma.govt.nz/library/reports-and-papers/audit-quality-review-report/

27 Nov 2023 - Medical Assurance Society (MAS) are to pay a $2.1 million penalty for making false and misleading representations to customers, following proceedings brought by the FMA. In September 2023, MAS admitted it breached section 22, one of the Fair Dealing provisions of the Financial Markets Conduct Act 2013 (FMCA), by failing to correctly apply multi-policy discounts and no claims bonus discounts to some customers who were entitled to them, failing to correctly apply inflation adjustments on some customer policies, and miscalculating benefit payments. https://www.fma.govt.nz/news/all-releases/media-releases/medical-assurance-society-to-pay-2-1-million-penalty/

27 Nov 2023 - The Australian Prudential Regulation Authority (APRA) has released for consultation a new cross-industry standard to centralise APRA's existing standards on definitions for authorised deposit-taking institutions and general, life and private health insurers. https://www.apra.gov.au/news-and-publications/apra-consults-on-new-cross-industry-standard-to-centralise-existing-standards

nib release 2023 sustainability, community and climate-related disclosure reports

nib Group have released their 2023 sustainability, community and climate-related disclosure reports. Some highlights from the reports include:

·         25,990 HealthChecks were undertaken by nib members.

·         Employee Experience Surveys in FY23 found an overall engagement score of 81%.

·         289 staff volunteered 1,546 hours across 14 charities.

·         34 suppliers completed continuous improvement plans to manage modern slavery risk.

·         The strategic procurement team has taken a proactive step toward reducing nib’s carbon footprint by introducing environmental criteria into the Request for Proposal (RFP) process.

·         nib introduced a new values-based employee recognition program where all employees have the opportunity to nominate their colleagues and vote on the most extraordinary achievements.

·         nib worked with Ngāti Whātua Ōrākei to facilitate the ‘Cultural Coalition’ Program (Whatua te Aho Tukurua). This six-week program teaches participants Māori language and values, encouraging employees to integrate these learnings into regular work activities and practices.

·         Gender pay equity gap has reduced to 2.75%.

·         985 Kiwis visited Clearhead’s Te Reo Māori website and chatbot

nib has identified climate-related risks including:

·         increased market pressure to provide community support and insurance affordability for those experiencing climate hazards;

·         increased illness & comorbidity due to chronic and compounding climate change hazard;

·         trauma, illness, property destruction and disruption leading to high rates of psychological distress;

·         increased incidents and severity of climate hazards causing pressure on discretionary income;

·         chronic and compounding climate change impacts putting pressure on health services;

·         energy and emissions performance standards creating compounding capital expenditure and operational costs;

·         limitations of current regulatory and pricing mechanisms to respond to climate hazards;

·         risk nib won’t meet growing mandatory reporting and regulatory requirements.

nib has developed a risk-management framework to manage and mitigate its material risks, and their board and management regularly identify and analyse risks and the effectiveness of the controls in place to manage these risks.

More daily news:

The board of Financial Advice NZ has appointed Sonja Barrett as the organisation’s new Member Director – Risk

FinTech NZ is asking members to fill in their 2024 New Zealand Fintech Pulsecheck Survey

mySolutions webinar 'Roles and responsibilities of Directors' 9am 18 October

Open letter to Pharmac saying the chief executive and the chairman need to step down

The Auckland High Court has ordered Vero to pay a penalty of $3.9 million for failing to apply multi-policy discounts to customers

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.

More daily news:

Cost of living crisis is changing conversations advisers are having with clients

Katrina Shanks writes of the importance of quality financial advice

mySolutions webinar 'Are you maximising your marketing potential' 9am 27 September

The Banking Ombudsman Scheme’s annual report shows customer complaints about scams rose 43% on the previous year

27% of 4,120 claims received by IFSO were related to health, life and disability insurance

Lifetime webinar 'Your Homeownership Adventure Begins Here' 7pm 27 September

Man trying to claim pregnancy care on his health insurance policy has complaint turned down by IFSO

Alzheimer’s Society recommends regular exercise to cut dementia risk

New Zealand’s economy grew 0.9% in the June quarter

Report that gives an overview of the New Zealand insurance market published

Duncan Cotterill’s ‘Covering the New Zealand Insurance market 2023’ report has been published, giving an overview of the current market and covering key issues facing insurers. Some key items of interest in the report include:

• An article on ESG trends and mandatory climate reporting – who it applies to, what do CRE’s have to do, what reporting is required, phased implementation and penalties. They also discuss greenwashing and the recent amendment to The Companies Act 1993 that clarifies that directors can consider matters other than the maximisation of profit when considering the best interests of a company.

• A discussion on the types of costs or losses usually covered by cyber insurance.

• A discussion on the approach the Supreme Court has confirmed when interpreting exclusion clauses in insurance policies.

More daily news:

Jon-Paul Hale feels let down by insurers' service delivery

Fidelity Life extend their no policy fees offer to 31 March 2024

Financial Advice NZ webinar 'Proving product suitability - strategies, evidence & client engagement' 20 September

FinTechNZ Innovation Roundtable: Shaping Future Retail Payments 19 September

mySolutions webinar 'Manage your entire AML compliance from one platform' 9am 13 September

Southern Cross Healthcare announce a new partnership - the Southern Cross Healthcare Northland Surgical Centre

Australian advisers and stakeholders outline alternative solutions for life insurance remuneration

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

Legal and regulatory update for the life and health insurance sector

9 Jun 2023 - ASIC has granted relief to life and general insurers to provide modifications and exemptions from the confirmation of transaction requirements contained in section 1017F of the Corporations Act in prescribed circumstances. The relief will expire on 1 July 2028.

Confirming transactions – deceased life insurance policyholder

This relief seeks to address situations where it may not be appropriate and/or necessary to confirm transactions with the holder of a life insurance policy where the life insurance policyholder is deceased and there is no alternative holder of the product.

Confirming transactions – recurring insurance benefit payments

For certain recurring benefit claims, this relief seeks to facilitate life and general insurers providing confirmation in the form of a statement given before, rather than after, the transactions are made. This includes benefit payments where the holder of the product is unable to work because of illness, injury or unemployment.

https://asic.gov.au/about-asic/news-centre/find-a-media-release/2023-releases/23-159mr-asic-grants-relief-to-insurers-from-certain-transaction-confirmation-requirements/

13 Jun 2023 - ASIC invites Australian entities to take part in the ASIC cyber pulse survey to measure cyber resilience https://asic.gov.au/about-asic/news-centre/find-a-media-release/2023-releases/23-160mr-asic-invites-australian-entities-to-assess-their-cyber-resilience/

13 Jun 2023 - NZ Police Financial Intelligence Unit released “The Suspicious Activity Report” for April 2023 https://www.police.govt.nz/sites/default/files/publications/fiu-monthly-report-apr2023.pdf

13 Jun 2023 - The Reserve Bank of New Zealand has released its finalised risk weighting decisions and response to the points raised in submissions. They have also published an Exposure Draft of the associated Banking Prudential Requirements (BPR) document that covers the technical changes needed to implement the decisions. https://www.rbnz.govt.nz/hub/news/2023/06/further-decisions-on-bank-risk-weights-released

14 Jun 2023 - Minister of Finance, Hon Grant Robertson, May 2023 diary released with the following potential financial services sector related meeting noted:
• 1 May 2023 – Ministerial meeting with RBNZ officials, Treasury officials
• 12 May 2023 – Speech at BNZ pre-Budget event
• 12 May 2023 – Speech at Centre for Sustainable Finance CEO roundtable
• 19 May 2023 - Speech at ANZ post-Budget event
• 22 May 2023 – Meeting with RBNZ
• 24 May 2023 - Call with RBNZ

https://www.beehive.govt.nz/sites/default/files/2023-06/Ministerial%20Diary%20May%202023.pdf