Legal and regulatory update for the life and health insurance sector

28 Aug 2024 - The Australian Prudential Regulation Authority (APRA) today announces some changes to its internal structure designed to ensure it remains equipped to deal with emerging and future challenges. The changes will support APRA’s updated strategic priorities. The most significant change will see APRA move to having its five industry supervision groups being managed in two supervision divisions instead of the current three frontline supervision divisions – Banking, Superannuation and Insurance (encompassing general, life and private health insurance). From 2 September, the two frontline supervision divisions will be:

• a General Insurance and Banking division; and 

• a Life Insurance, Private Health Insurance and Superannuation division. 

https://www.apra.gov.au/news-and-publications/apra-announces-internal-reorganisation-to-better-support-strategic-priorities

28 Aug 2024 - The Australian Prudential Regulation Authority (APRA) has published its latest Corporate Plan outlining how it will maintain the strength and stability of Australia’s banks, insurers and superannuation trustees over the next four years. https://www.apra.gov.au/news-and-publications/apra-outlines-new-priorities-2024-25-corporate-plan

29 Aug 2024 - Climate reporting entities (CREs) with reporting periods ending 31 March 2024 have been lodging their climate statements on the Climate-related Disclosures Register. The FMA will be releasing a Climate-related Disclosures Monitoring Report in November this year, detailing their key monitoring findings and areas they would like CRE's to focus on for the next reporting period. https://www.fma.govt.nz/library/guidance-library/crd-monitoring-plan-2023-2026/

29 Aug 2024 - As part of Sorted Money Month, the FMA have released a series of videos designed to kickstart conversations around money. https://www.fma.govt.nz/library/campaigns/sorted-money-month-2024/

29 Aug 2024 - The FMA is hosting two Fairness Research roundtables with banks, non-bank deposit takers, insurers, fund managers, and financial advice firms to discuss fairness in financial services. The first event, with larger-sized firms, explored key topics including the interpretation of fairness from both consumer and provider perspectives, the role of governance in promoting fair outcomes, and future trends that may impact fairness in the sector. A second event, with smaller-sized firms, takes place in September. https://www.fma.govt.nz/news/all-releases/media-releases/understanding-fairness-in-financial-services

29 Aug 2024 - All licensed Financial Advice Providers must submit an annual regulatory return as part of licensing conditions. 31% have already submitted their regulatory return during July and August. The submission period will close on 30 September 2024. Regulatory returns should be submitted through the FMA Online Services portal. https://www.fma.govt.nz/business/online-services

29 Aug 2024 - In September The FMA will be publicly consulting on the questions they propose to ask in the regulatory returns for financial institutions.  This consultation will be open for a 6-week period from 16 September 2024 to 25 October 2024. 

29 Aug 2024 - The annual Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Conference is being held in Wellington this year, on Wednesday 30 October and Thursday 31 October.  Hosted by the New Zealand Financial Intelligence Unit and The Association of Certified Anti-Money Laundering Specialists, the theme of this year’s conference is “Shifting Paradigms: Navigating the Future of Financial Crime”. https://www.police.govt.nz/fiu-acams-conference-2024

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Customise your Needs Analysis settings on Advicemonster

Did you know you can customise your needs analysis settings in Advicemonster? You can set what product types you advise on, change the after-tax annual interest rate, default interest rate and more. Find out how below.

nib New Zealand makes $21.2million underlying operating profit in FY24

nib new Zealand have released their FY24 financial results. Key numbers include:

• Underlying operating profit of $21.2 million, down from $33.4 million in FY23

• Resident policyholder growth of 3.1%

• Insurance revenue of $402.1 million, up 9.4% from FY23

• Insurance service costs of $380 million, up 14% from FY23

• Net assets of $91.8 million, up from $84.6 million in FY23

nib NZ Chief Executive Rob Hennin said of higher claims costs and utilisation rates

 “We are focused on costs and containing inflation in the health sector as much as we can because those costs are passed along to our members… We have undertaken measures to help bring about operating efficiencies in the year ahead, including automating claims processing.”

More news:

Brent McGregor says balancing act between regulatory requirements and customer experience is tough

Consilium’s KiwiWRAP KiwiSaver Scheme has cracked the $100 million in funds under management

Simon Papa analyses the Commerce Commission's bank report and what it means for mortgage advisers

Research and website upgrades: what you need to know

QPR Database V16 has been released! 

Our Research team have made some monstrously good updates to the QPR database recently. If you’ve noticed we’re running a bit slower than usual, please refresh your page and scroll down to ensure that you’re on our latest version – QUOTE ENGINE V.3.0 B1 | QPR V.16.0 | WEB V4.6.0

Our latest updates to Researchmonster include:

– Research for the following insurers are now available to include in your comparison:

o   OneChoice:

·        Life, Trauma (Accelerated), and TPD (Any Occupation Accelerated)

o   Booster

·        Super Simple Life

o   Chubb Life & Living (replaces LifeOne in the main quote flow, however, can still be accessed via Standalone Head to Head)

·        Life, and Trauma (Standalone)

o   NZ Seniors

·        Term Life

o   Greenwich

·        QuickCover Life

These changes have led to an update of our Product Map, click here to download the most recent version.

– Policy document update for Unimed Hospital Select effective 1 August 2024.

o   Rating changes applied to:

·        Loyalty Benefits, Non-Surgical Benefits, Child Features, and Exclusions

– Policy document updates for:

·        AA Health

·        AA Life

·        ANZ Life & Living

·        SBS (Term Life)

– Reviews:

o   Based on adviser feedback, we have recently updated the Extras and Options on Income and Mortgage selections on Quotemonster:

·        Fidelity Life’s Extras package now includes Specified Medical Conditions, Specific Injury Benefit, Death Benefit, and TPD 

·        Partners Life Options package now includes Injury Benefit, and Trauma Benefit

o   Trauma remediation: sub-items in Paralysis, amount score in Financial Planning & Legal Advice

o   Medical remediation: sub-item in Physiotherapy (Accuro)

Recent Pricing Updates

We are now quoting the latest Unimed medical rates effective 1 August.

Standalone Head to Head is a powerful tool subscribers can use to:

–        Compare legacy products for replacement business

–        Compare products from the same provider; e.g., AIA Critical Conditions vs Progressive Care

–        Compare different product sets; e.g., Severe Trauma vs Comprehensive Trauma

–        Quick head to head research comparisons

Please note this feature is still in Beta version so please reach out to us if you have any feedback that you would like us to consider in our next round of development.

Business Insurance is a powerful tool Advicemonster subscribers can use to quote, research, and run a needs analysis on for Life, Trauma, TPD and Key Person. We highly recommend joining us for our next online training session to learn more about the service, and as a thank you for attending we can offer a 14-day trial on your account for new users.

Upcoming training sessions:

– Introduction to Quotemonster

Quotemonster training session where we demonstrate the basic functions of our website, along with some handy tips and tricks along the way.

Friday, 30 August 2024 9:30 am-10:30 am

– Demystifying Advicemonster

Advicemonster training session where we demonstrate how to use our needs analysis and statement of advice (SOA) tools.

Friday, 30 August 2024 10:30 am-11:30 am

– Business Risk Research and SOAs with Quotemonster

Business risk pricing, research, and SOA demonstration.

Friday, 30 August 2024 12:00 pm-12:45 pm

– Research Deep Dive

Join our research team as we meet up online and have a discussion on a specific research topic.

If you have any questions or are interested in attending one of the above-mentioned sessions, please send us a request on info@quotemonster.co.nz 

Happy Crunching!

Kiwibank report $202 million after-tax profit

Kiwibank has featured in the news a lot recently, from the Commerce Commission’s recommendation that the Government should consider what is necessary to make Kiwibank a disruptive competitor, to the release of Kiwibank’s latest financial results.

Kiwibank posted a record $202 million after-tax profit for the year to June 30 2024, up 15% from the previous year. Kiwibank were able to grow their lending book by 9.3% to $32.4 billion. Impressively, home lending grew 2.7 times faster than the market and business lending grew 3 times faster than the market. Deposits increased by $2.4 billion, growing the deposit book by 9.4% to $28.2 billion

Steve Jurkovich, Kiwibank CEO, has said a $500 million capital infusion would

“give us a lot of runway to keep growing as fast as we are now, which is 9.5%, 10% [per annum], which is pretty large gains. That sort of investment over the next three, four years would give good runway.”

"With the right support and delivery of the right business plan and right initiatives, I think we could double our size in five years.”

Jurkovich has also said it may not be essential for the bank to remain 100% NZ owned, pointing to other examples of successful majority owned businesses like Air New Zealand. Jurkovich cautions that any requirement to pay sizeable dividends could impact their ability to grow, given that capital growth to date has mainly been via retained earnings.

Mortgage advisers now account for around 35% of Kiwibank’s total mortgage book, having originated 71% of Kiwibank home loans this year. Kiwibank’s accredited advisers have grown to about 1,000 now, up from 250 at June 30, 2022.

More news:

Report on the MAS 2024 Annual General Meeting released

Antonia Watson says the big banks can't afford to be NZ owned

TSB respond to the Commerce Commission’s banking study

FinTechNZ Hui Taumata 2025 is on 11 March 2025

Investment News release their KiwiSaver annual report

Study finds a majority of New Zealanders feel financially uncomfortable

Tips on what to eat to beat high blood pressure

Legal and regulatory update for the life and health insurance sector

22 Aug 2024 - Australia’s public and private markets and emerging financial products will form a new pillar of ASIC’s expanded strategic priorities. https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-releases/24-184mr-asic-expands-strategic-priorities-for-coming-12-months/?altTemplate=betanewsroom

22 Aug 2024 - Inland Revenue is seeking feedback on the scope of its next long-term insights briefing.
Inland Revenue is proposing that its next long-term insights briefing explores what broad structure of the tax system would be suitable for the future, given long-term fiscal pressures and current tensions in our system. The briefing would approach this topic by focusing on two elements of the tax system: the regimes through which we tax income and consumption, and our mix of tax bases. The closing date for feedback is 4 October 2024. https://www.taxpolicy.ird.govt.nz/consultation/2024/2024-long-term-insights-briefing

22 Aug 2024 - The Australian Prudential Regulation Authority (APRA) has released its suite of quarterly industry aggregate insurance statistical publications with enhanced content and presentation. The first edition of the enhanced quarterly publications includes data for the September 2023, December 2023 and March 2024 reporting periods. https://www.apra.gov.au/news-and-publications/apra-releases-enhanced-quarterly-insurance-statistics

23 Aug 2024 - The Financial Services Council NZ publish the August 2024 edition of Regulatory Forecast, a member-only document https://members.fsc.org.nz/fsc-corporate-members/regulatory-forecast-august-2024

26 Aug 2024 - The Office of the Privacy Commissioner has released recordings of presentations shown during Privacy Week 2024. https://privacy.org.nz/news/forums-and-seminars/privacy-week/privacy-week-2024/

Commerce Commission release banking competitiveness study

The Commerce Commission have released the Final Report on personal banking competitiveness. The 14-month market study found

“a stable, highly profitable, two-tier oligopoly with no disruptive maverick and a lack of obvious or aggressive price competition.”

The study found little strategic differentiation between the major banks and found their growth targets focus on maintaining market share and protecting margins and profitability, limiting competitiveness and innovation.

The Commission’s recommendations to Government can be grouped into four key areas and broadly speaking involve making Kiwibank a more disruptive competitor, accelerating progress on open banking, ensuring the regulatory environment better supports competition and empowering consumers.

While both the Finance and Mortgage Advisers Association of New Zealand (FAMNZ) and Financial Advice New Zealand (FANZ) have welcomed the report, after criticising the draft report which was released in March.  Since then, the Commerce Commission has engaged with both associations as well as other representatives from the mortgage industry to better understand the role advisers work.

Leigh Hodgetts, country manager of FAMNZ, has called out the Commerce Commission’s statement that advisers should put more emphasis on price, saying that there are many factors around individual circumstances that must be considered when a consumer takes a loan.

Financial Advice New Zealand said it would be seeking clarity on the recommendations, in an effort to determine any unintended consequences.

More news:

Tony Vidler recommends advisers can evidence why their advice was suitable at the time

mySolutions webinar 'The meeting before the meeting' 28 August

Asteron Life sale should be completed by the end of January 2025

Asteron Life profit after tax fell by 27% to $19m

Financial Advice NZ Central Branch Meeting 27 August

Financial Advice NZ webinar 'Financial advice is moving from product to people and from money to meaning' 4 September

Southern Cross Health Insurance opens nominations for Wayfinder Awards

ASB CEO Vittoria Shortt would like to see KiwiSaver policy changes

The FMA publish the latest 'Money with Mary'

IFSO needs to incorporate as a limited liability company for merger

Suncorp Group net profits after tax are up by nearly 12%

Survey highlights increasing concerns among kiwi workers about their mental and physical health

The 2024 Workplace Wellbeing survey, conducted by nib New Zealand and the Employers and Manufacturers Association (EMA), has found that 80% of respondents have been negatively impacted by the current cost-of-living crisis.

• 64% are concerned for the mental health and wellbeing of their family

• 56% are worried about their own mental health and wellbeing

• 52% are concerned about the risk of burnout at work

• 50% said the rising cost of living has negatively impacted their mental health (rising to 63% of 16 – 30 year olds)

In more positive news, 61% said their workplace proactively manages wellbeing, up from 53% in 2022. Fewer employees are being impacted by understaffing (47% down from 64%), poor work-life balance (36%, down from 42%), and the pressure to work long hours (34%, down from 39%).

Kiwis are putting more value on systems that prioritise employee wellbeing, with 60% rating Employee Assistance Programmes (EAP) as important, and 72% valuing wellbeing initiatives and subsidies. The value of employer-provided insurance continues to grow, with 64% considering medical and health insurance a benefit they look for when switching jobs, up from 57% in 2022, 48% valuing income protection illness cover and 43% looking for life insurance benefits.

Rob Hennin, Chief Executive at nib New Zealand, said

“There’s no better time than now for employers to stand up and proactively support their teams’ mental and physical health, empowering them to perform at their best knowing there’s someone in their corner no matter what happens. Fostering this positive workplace culture starts from the top down, so it’s just as important for business leaders to embody these values in their day-to-day.”

The survey collected responses from 1,229 NZ workers this May.

More news:

Quotemonster offers advisers information on KiwiSaver products

Commissioner of Health NZ says reducing treatment delays is his main priority

End of Life Choice Act in operation – a review

https://www.nzherald.co.nz/nz/assisted-dying-should-the-six-months-to-die-requirement-be-scrapped-in-new-zealand/LULHZZIOTJAYLA5NESDHUZSSYM/

The New Zealand Herald published a good article reviewing the operation of the End of Life Choice Act 2019, which is well into its third year of operation. The article details some cases and how they have been working – or not – for the people who wanted to have an assisted death.

“The End of Life Choice Society, an advocacy group which engages frequently with the ministry, said the clause excluded a large number of patients, especially those with neurogenerative diseases like motor neurone disease (MND) or Huntington’s disease. It was more difficult to predict when people with these conditions would die because they did not decline in a linear way.

The society’s president, Ann David, said the law was working well - but for a narrow group of people, mainly cancer patients.”

There have been 775 assisted deaths in approximately two and a half years. In September 2020we forecast the number of expected assisted deaths based on a similar law passed in Canada. That analysis suggested there would be around 238 assisted deaths per annum, and our current rate is about 300. Although approximately one third higher than expected, there remain many deaths which were requested which have been declined due to the uncertainty of meeting one of the requirements: that death is likely within six months. The case studies presented in the article are worth considering. The issues with estimating death are informative because we also consider these when assessing terminal illness claims, although with a longer time period based on most policy terms.