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.
Legal and regulatory update for the life and health insurance sector
2 Apr 2024 - The Reserve Bank has announced two new members of its Monetary Policy Committee (MPC). Carl Hansen and Prasanna Gai are set to join the set-member MPC responsible for the crucial monetary policy decisions that uphold price stability in New Zealand. Hansen began his tenure April 1, succeeding Peter Harris. Gai will start on July 1, taking over from Caroline Saunders. https://www.beehive.govt.nz/release/reserve-bank-appointments
2 Apr 2024 - The Reserve Bank of New Zealand has welcomed progress on whenua Māori lending. The Māori Land Court recently released a practice note in regard to lending on Māori freehold land - whenua Māori. The note provides guidance to assist landowners, lawyers and the banking sector with lending against Māori freehold land. https://www.rbnz.govt.nz/hub/news/2024/04/rbnz-welcomes-progress-on-whenua-maori-lending
2 Apr 2024 - The Financial Markets Authority is considering a class exemption that would allow listed companies to bring certain green, social, sustainable, and sustainability-linked (GSSS) bonds to market more quickly and without incurring most of the regulatory costs of a full retail investment offer. This would operate on a similar basis to the same class exclusion available in the Financial Markets Conduct Act 2013 (FMC Act), that allows companies that are already-listed to raise further capital using simple, streamlined disclosure. Submissions close 30 April 2024. https://www.fma.govt.nz/business/focus-areas/consultation/consultation-proposed-exemption-for-certain-green-social-sustainability-and-sustainability-linked-bonds/
2 Apr 2024 - Changes to ACC’s Accredited Employers Programme (AEP) aim to deliver a better experience for businesses and workers whose work injury claims are handled by the organisation directly, rather than through ACC. Accredited employers will be given better insights into their performance, more support and guidance to help them improve their worker’s experience as well as injured workers being better supported by their employers.
The changes focus on 4 areas:
Claims and injury management assessment: An improved assessment of the claims and injury management that also better captures workers’ experience and remove unnecessary compliance.
Performance monitoring: A new performance monitoring model that will give accredited employers access to clear and up-to-date information on their performance, the ability to lift performance, and incentives to perform better.
New health and safety assessments: An updated ACC health and safety audit process and a new option of ISO 45001 certification will drive higher quality health and safety systems.
Updated pricing options: More choices under the Partnership Discount Plan, enabling employers to take on longer claims management periods, providing workers with complex injuries greater assurance and more continuity of support.
The changes will take effect from 1 April 2025, with 1 years notice, so accredited employers and ACC have time to prepare and adapt their processes and systems.
https://www.mbie.govt.nz/about/news/final-changes-to-accs-accredited-employers-programme-confirmed/
2 Apr 2024 - The Reserve Bank of New Zealand publish an op-ed by Reserve Bank Governor Adrian Orr. https://www.rbnz.govt.nz/hub/news/2024/04/rbnz-op-ed-on-cofr
Southern Cross cautioned by FMA for neglecting to apply advertised discounts
The Financial Markets Authority (FMA) has issued warnings to Southern Cross Medical Care Society and Southern Cross pet Insurance for failing to apply advertised discounts to their insurance products.
Both entities have accepted they had breached the fair dealing provisions of the Financial Markets Conduct Act by making false or misleading representations. The FMA determined the cause of each issue was due to poor controls and/or technical errors. The FMA found no evidence of deliberate misconduct.
Southern Cross Pet Insurance initially reported to the FMA in November 2022 some of the contraventions. Further enquiries from the FMA and an internal review in the wider Southern Cross Group established the extant of the contraventions.
SCPI failed to correctly apply the following discounts:
· Additional pet discount
· Direct debit discount
· Southern Cross membership discount.
SCMCS failed to correctly apply the following discounts:
· Free child discount
· Healthy lifestyle rewards discount
· Low claims discount.
The total amount of Southern Cross Pet Insurance premiums overcharged was $424,508, affecting 7,542 customers. Southern Cross Medical Care Society overcharged $161,547 across 1,957 customers.
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FAMNZ will be taking membership applications from next month
In 2023, four out of five New Zealand businesses embraced flexible working hours
nib rates are now live!
We can confirm that the rate changes for nib effective 1 April 2024 are now live on Quotemonster.
We are pleased to confirm that the premium changes for nib, effective 1 April 2024 are live on Quotemonster.
Click here to read our nib quarterly rate review results.
Happy Crunching!
AXA report sheds light on concerning state of mental health and wellbeing at work globally
Axa’s latest Mind Health Report has found nearly a third of people worldwide suffer from a mental health condition.
AXA’s latest Mind Health Report has found nearly a third of people worldwide suffer from a mental health condition.
The research was a collaborative effort between AXA and IPSOS, and surveyed 16,000 people across 16 countries in Europe, Asia and America, with a focus on mental health and wellbeing in the workforce.
The report found three in four employees were grappling with mental health issues attributable to their work environment, with respondents mentioning either tiredness, trouble sleeping or stress. Overall, 23% of employees had taken mental health-related sick leave, jumping to 38% of younger people. The Southern Cross Workplace Wellness Report uncovered similarly concerning findings around increased stress being experienced by workers.
Mental health support offered by employers is a key factor in employees choosing to stay with a company, with 62% of those aged 18 to 44 factoring it into their decision. More than half of respondents said company-driven mental health initiatives and benefits influence their engagement at work.
More daily news:
Trauma claims data infographic - QPR v15.7
Following on from our latest QPR database upgrade, we have also updated our Trauma claims data infographic to reflect the addition of a new minor condition – Cerebral Aneurysm.
Following on from our latest QPR database upgrade, we have also updated our Trauma claims data infographic to reflect the addition of a new minor condition - Cerebral Aneurysm. This is now available for download to all Researchmonster and Advicemonster subscribers and can be found in the Research Tools section of the main menu.
Happy Crunching!
Legal and regulatory update for the life and health insurance sector
21 March 2024 - Insurance Contracts Bill had first reading in Parliament. https://bills.parliament.nz/v/6/fcc98f82-e1f8-4aa4-6c02-08dc494421e8?Tab=history
25 March 2024 - The Reserve Bank of New Zealand has published an analytical note proposing improvements to the methodology used by the Reserve Bank of New Zealand to assess labour market indicators of inflationary pressure. Measuring inflationary pressure from the labour market can be improved by watching a narrow set of four high-quality indicators: 1) the job transition rate (the share of workers switching between jobs), 2) the job vacancy-to-unemployment ratio, 3) the unemployment rate, and 4) a survey measure of labour as a limiting factor for business production. https://www.rbnz.govt.nz/hub/news/2024/03/improving-how-we-measure-inflationary-heat-in-the-labour-market
26 Mar 2024 - The Reserve Bank of New Zealand has published Guidance for our regulated entities on managing climate-related risks. https://www.rbnz.govt.nz/hub/news/2024/03/guidance-issued-on-managing-climate-related-risks
26 March 2024 - The Financial Markets Authority has issued warnings to Southern Cross Medical Care Society (SCMCS) and Southern Cross Pet Insurance (SPCI) for failing to apply advertised discounts to each entities’ respective insurance products. The FMA is satisfied, and both entities accept, that they breached the fair dealing provisions of the Financial Markets Conduct Act by making false or misleading representations. The representations relate to the failure on each entities’ part to correctly apply advertised discounts to affected customers’ invoices, resulting in overcharged premiums. The FMA determined that the cause of each issue was due to poor controls and/or technical errors.
SCPI made an initial report to the FMA in November 2022 disclosing some of the contraventions and later reported more details. Following these disclosures, further enquiries from the FMA and an internal review in the wider Southern Cross Group, the extent of the contraventions was established.
SCPI failed to correctly apply the following discounts:
Additional pet discount
Direct debit discount
Southern Cross membership discount.
SCMCS failed to correctly apply the following discounts:
Free child discount
Healthy lifestyle rewards discount
Low claims discount.
The total amount of SCPI premiums overcharged was $424,508, affecting 7,542 customers, approximately 1.28% of its customer base. SCMCS overcharged $161,547 across 1,957 customers, approximately 0.2% of its customer base.
https://www.fma.govt.nz/news/all-releases/media-releases/fma-warns-southern-cross/
28 Mar 2024 - The Council of Financial Regulators has released an updated Regulatory Initiatives Calendar for the financial sector for Q1 2024. https://www.cofr.govt.nz/files/regulatory-initiatives-calendar/regulatory-initiatives-calendar-q1-2024.pdf
28 Mar 2024 - The FMA is warning the public to be cautious after fake documents claiming to be issued by the FMA were sent out as part of what appears to be a ‘recovery scam’ - where previous victims of financial crimes are targeted by criminals promising to help get lost money back. https://www.fma.govt.nz/library/warnings-and-alerts/
28 Mar 2024 - DIA encourages reporting entities to get RealMe verified before annual reports are due. From 1 July 2024, you’ll be able to file your AML/CFT annual report via AMLOnline. https://www.dia.govt.nz/AML-CFT-Get-your-RealMe-verified-early-this-annual-reporting-season
28 Mar 2024 - The FMA has said that overtime they will assess whether their regulatory framework needs strengthening to support better deployment of Generative Artificial Intelligence. https://www.fma.govt.nz/library/opinion/gen-ai/
28 Mar 2024 - The Commerce Commission sees "good reasons" to recommend designation of the interbank payment network to Commerce and Consumer Affairs Minister Andrew Bayly. https://www.interest.co.nz/banking/127024/commerce-commission-wants-more-influence-over-interbank-payments-potentially
Asteron Life updates personal and business insurance products
Asteron Life has unveiled a raft of updates to their personal and business insurance products.
Asteron Life has unveiled a raft of updates to their personal and business insurance products.
The changes include clarification of existing policy terms to ensure greater transparency and ease of understanding and a range of new and enhanced benefits.
The new benefits and enhancements include:
Repatriation benefit on personal and business life cover
Advancement benefit for terminal conditions on personal life cover
Shortened waiting periods for income protection and mortgage and living cover
Cover conversion benefit on business disability cover and farmers disability cover
Enhancements to the Funeral benefits on life cover, kids cover and business expenses
Enhancements to two definitions for trauma recovery and 11 definitions for major trauma
The requirement for 14 days total disability as part of the waiting period has been removed from business disability cover, farmers disability cover and business expenses cover
Introduction of a premium and cover suspension to the optional needlestick benefit
Removal of some restrictions from various benefits such as specific injury support – lump sum and monthly, trauma reinstatement option and the crisis benefit within the optional immediate assist package
Claire Sutton, Executive Manager Life Portfolio and New Business at Asteron Life said
“It's key that our range of covers continue to add value for our customers, policies and terms are easy to understand, and insurance remains as affordable and accessible as possible. We know that these things really matter for our customers and advisers. We also worked hard to ensure that these improvements have not increased customer premiums, given we know how tough it is for many New Zealanders right now.”
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Commerce Commission to meet with Financial Advice New Zealand after accused of being out of touch
Legal and regulatory update for the life and health insurance sector
14 Mar 2024 - The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have published further information to help banks, insurers and superannuation trustees prepare for the commencement of the Financial Accountability Regime (FAR).
The FAR, which takes effect for banks from 15 March 2024 and one year later for the insurance and superannuation industries, imposes a strengthened responsibility and accountability framework to improve the risk governance cultures of APRA-regulated entities, their directors and most senior executives.
The information package includes the following guidance materials relevant to all industries:
an information paper to assist entities and their accountable persons in understanding and complying with their obligations under the FAR;
an updated accountability statement guide and template to help entities subject to the FAR enhanced notification obligations to prepare accountability statements; and
reporting form instructions to assist entities in reporting FAR breaches to APRA and ASIC.
15 Mar 2024 - Hon Andrew Bayly's speech at Insurance Council of NZ is released. https://www.beehive.govt.nz/speech/insurance-council-nz-speech-7-march-2024-auckland
15 Mar 2024 - Minister of Commerce and Consumer Affairs, Hon Andrew Bayly February 2023 diary released with the following potential financial services sector related meeting noted:
• 1 Feb 2024 – MEET: Commerce Commission (MBIE and ComCom Officials)
• 9 Feb 2024 – MEET: Commerce Commission (Commerce Commission)
• 12 Feb 2024 – CALL: FMA Chair (Mark Todd)
• 14 Feb 2024 –MEET: Chartered Accountants ANZ (Amir Ghandar)
• 20 Feb 2024 – MEET: Takeovers Panel (Takeovers Panel Members)
• 21 Feb 2024 -MEET: Insurance Council CE (Tim Grafton)
• 21 Feb 2024 – MEET: Commerce Commission (Commerce Commission
• 23 Feb 2024 – MEET: NZ Banking Assoc (Roger Beaumont)
• 28 Feb 2024 –MEET: Commerce Commission (John Small and MBIE officials)
• 28 Feb 2024 – MEET: Financial Ombudsmen (Susan Taylor)
18 Mar 2024 - RBNZ publishes assessment of Capital Review implementation which assesses the first 2 years of Capital Review implementation, from 2021 to 2023, and examines progress with phasing-in the Reserve Bank’s new higher capital requirements. https://www.rbnz.govt.nz/hub/news/2024/03/rbnz-publishes-assessment-of-capital-review-implementation
20 Mar 2024 - A new research paper by the New Zealand Institute of Economic Research (NZIER), commissioned by the RBNZ, outlines how migration can add to or reduce inflationary pressures depending on the size and direction of flows and the characteristics of migrants. https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=f72119dd50&e=082a4db7be
Quarterly rate review results in rising premiums at nib
nib has reviewed its health insurance premiums. Current members’ premiums are reviewed annually at their policy anniversary, with the increases ranging from 9% to 16%, as per below.
Premiums for prospective new members will be updated from 1 April 2024, with new rates being automatically updated in nibAPPLY.
You can find out more in their frequently asked questions here.
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Commerce Commission says mortgage advisers at risk of being ‘unduly influenced’ by commissions
Controversy has arisen based on the back of some comments John Small, Commerce Commission chair has made around the mortgage advice sector, on the back of the Commerce Commission releasing a draft report from the market study on the banking sector that has recently been released.
Controversy has arisen based on the back of some comments John Small, Commerce Commission chair has made around the mortgage advice sector, on the back of the Commerce Commission releasing a draft report from the market study on the banking sector that has recently been released.
Small told journalists that he’s ‘not sure if you went to a mortgage broker that they would tell you’ about how they only work with certain banks and the different commissions advisers can receive, stating,
“From the broker's point of view, they will get different amounts of money from different banks. I'm not sure when you go to a mortgage broker that they would declare that to you.”
There has been a lot of feedback from mortgage advisers on the article posted on Good Returns, qualifying that they both state which banks they work with and the fees they receive from each bank in their disclosure statements all clients receive.
We study disclosure documents and note that they are all good at disclosing the range of lenders that the mortgage adviser offers to clients. The information is in the public disclosure document and is clear. The range that most mortgage advisers have access to through their aggregator is usually extensive as well - they are subject to commercial pressures and operate under strong incentives to ensure that they have relationships with at least the main lenders. Most have longer lists. Although we cannot access robust statistical information on disclosure on specific fees and commissions once a preferred lender is established, we note that there is clear guidance on how to make effective commission disclosure. So it would be interesting to hear more details on the experiences are leading the Commerce Commission to this viewpoint. On the other hand, the comments about AML/CFT limiting access to even basic banking services ring true to many of us in the sector.
More daily news:
Financial Advice NZ central branch meeting 26 March, Palmerston North