Legal and regulatory update for the life and health insurance sector

29 Oct 2024 - Global privacy authorities, including the office of the Privacy Commissioner, have engaged with some of the world’s largest social media companies after issuing a joint statement on data scraping last year. As a result of this engagement, they have now issued a follow-up statement laying out additional takeaways for industry. This follow-up joint statement lays out further expectations, including that organisations:

• Comply with privacy and data protection laws when using personal information, including from their own platforms, to develop artificial intelligence (AI) large language models.

• Deploy a combination of safeguarding measures and regularly review and update them to keep pace with advances in scraping techniques and technologies.

• Ensure that permissible data scraping for commercial or socially beneficial purposes is done lawfully and in accordance with strict contractual terms. https://www.privacy.org.nz/publications/statements-media-releases/global-privacy-authorities-issue-follow-up-joint-statement-on-data-scraping-after-industry-engagement/

29 Oct 2024 - APRA has released its Life Insurance Claims and Disputes Statistics publication, covering a rolling 12-month period from 1 July 2023 to 30 June 2024. https://www.apra.gov.au/news-and-publications/apra-and-asic-publish-latest-data-on-life-insurance-claims-and-disputes-9

30 Oct 2024 - The FMA are consulting on renewal of class exemption for DIMS licensees from certain financial reporting requirements, consultation closes 29 November 2024. https://www.fma.govt.nz/business/focus-areas/consultation/consultation-renewal-of-class-exemption-for-dims-licensees-from-certain-financial-reporting-requirements/

30 Oct 2024 - ASIC has released findings from its financial reporting and audit surveillance for the 12 months to 30 June 2024, and announced a proactive surveillance focused on auditors’ compliance with independence and conflicts of interest requirements. https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-releases/24-240mr-asic-releases-fy-2023-24-financial-reporting-and-audit-report-and-launches-auditor-independence-surveillance/?altTemplate=betanewsroom

30 Oct 2024 - The FSC has published its KiwiSaver Industry Spotlight September 2024. https://blog.fsc.org.nz/kiwisaver-spotlight-september-2024

30 Oct 2024 - The Government is seeking public feedback on a proposed approved information sharing agreement (AISA) between Inland Revenue and the Ministry of Business, Innovation and Employment (MBIE). The AISA would allow Inland Revenue and MBIE to share prescribed information with the other agency for the benefits outlined in the discussion document. https://www.taxpolicy.ird.govt.nz/news/2024/consultation-information-sharing-ir-mbie-aisa

31 Oct 2024 - The FMA has decided to renew the Financial Markets Conduct (Disclosure of Relevant Interests by Directors and Senior Managers) Exemption Notice 2019, and the Financial Markets Conduct (NZCDC Settlement System) Exemption Notice 2019, for a further five years. They are working to finalise new notices to give effect to this decision, which they intend to have in place before the current notices are revoked on the close of 30 November 2024. https://www.fma.govt.nz/business/focus-areas/consultation/consultation-class-exemption-renewal-for-disclosure/

30 Oct 2024 - The FSC has published its Life Insurance Industry Spotlight September 2024. https://blog.fsc.org.nz/lifeinsurance-spotlight-september-2024

Legal and regulatory update for the life and health insurance sector

24 Oct 2024 - The FMA published its annual report for the year to 30 June 2024. The report details the FMA’s core focus areas: monitoring and supervision of market participants, implementation of new legislation, enforcement action and providing resources for investors and consumers.  The FMA also released its annual ‘Ease of doing business’ report, which surveys stakeholders and industry participants to understand the effectiveness of their interactions with the FMA, and their views on FMA’s overall effectiveness in delivering its mandate. https://www.fma.govt.nz/news/all-releases/media-releases/fma-publishes-2024-annual-report/

25 Oct 2024 - APRA publish their opening statement to the House of Representatives Standing Committee on Economics - October 2024. https://www.apra.gov.au/news-and-publications/opening-statement-to-house-of-representatives-standing-committee-on-6

25 Oct 2024 - ASIC publish the opening statement by ASIC Chair Joe Longo at the House of Representatives Standing Committee on Economics. https://asic.gov.au/about-asic/news-centre/speeches/house-of-representatives-standing-committee-on-economics-opening-statement-25-october-2024/?altTemplate=betanewsroom

25 Oct 2024 - The Justice Select Committee have published their final report on the Privacy Amendment Bill. https://selectcommittees.parliament.nz/view/SelectCommitteeReport/5f2d852a-1aba-4b8b-2620-08dcf48e13aa

25 Oct 2024 - The Takeovers Panel offices will close from the end of the day on Monday, 23 December 2023, and reopen on Monday, 6 January 2024. https://www.takeovers.govt.nz/guidance/codeword/issue-57/panel-christmas-close-down-period

27 Oct 2024 - The FMA's annual report shows they turned in a more than $2.8 million surplus during the 12 months to June 30. The FMA reported revenue of almost $80.7 million while expenses hit a record high of $77.8 million.The FMA completed investigations into 1,118 ‘misconduct cases’, of which 993 were dealt with in the ‘compliant’ timeframe. https://investmentnews.co.nz/investment-news/fma-over-spends-books-surplus-on-legal-winnings/

29 Oct 2024 - APRA publish Deputy Chair Margaret Cole's speech to the AFR Super & Wealth Summit 2024. https://www.apra.gov.au/news-and-publications/apra-deputy-chair-margaret-cole-speech-to-afr-super-wealth-summit-2024

29 Oct 2024 - ASIC is urging financial services and credit licensees to ensure their governance practices keep pace with their accelerating adoption of artificial intelligence (AI). The call comes as ASIC’s first state of the market review of the use and adoption of AI by 23 licensees found there was potential for governance to lag AI adoption, despite current AI use being relatively cautious. https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-releases/24-238mr-asic-warns-governance-gap-could-emerge-in-first-report-on-ai-adoption-by-licensees/?altTemplate=betanewsroom

This week is Cyber Smart Week

Running from 21 – 27 October, Cyber Smart Week is here! With the theme of ‘The Scamathon’, it highlights the importance of being more secure online. Some key precautions you should be taking include:

• Using long, strong and unique passwords

• Using two-factor authentication (2FA)

• Reporting any suspected scams to your management or IT teams

• Turning on automatic updates

• Stopping to think before you click – could it be a scam?

Own your online has produced a 5-part video series about business online security – you can watch them all here.

• Episode 1 - How to protect your business: Learn why it’s important for your business to prioritise online security and how to start getting your business in better shape.

• Episode 2 - How to protect your online accounts: Learn about the most important protections you can put in place for your online accounts.

• Episode 3 - Protecting data and systems: Learn why it’s important to protect your data and your customers’ data and how to put these protections in place. Also learn how your business can best recover from an online attack.

• Episode 4 - Protect your website and social media: Learn how to put the right protections in place for your website and social media accounts.

• Episode 5 - How to spot phishing: Learn about the most common online attack – phishing – and how your business can avoid getting caught by it.

They are also running a series of online events around online security you can register to join.

·         Online security for individuals, 1pm, Monday 21 October 2024

·         Working together to improve cyber resilience across the health sector, 10:30am, Tuesday 22 October 2024

·         Online security for small businesses – simple steps for a big improvement, 3pm, Tuesday 22 October 2024

·         Supporting clients with cyber security - for mentors and advisors, 11am, Wednesday 23 October 2024

·         Financial sector cyber security threats and protections, 2pm, Wednesday 23 October 2024 

·         Online security for seniors, 1pm, Thursday 24 October 2024

·         Cyber security insights for tech professionals, 10:30am, Thursday 24 October 2024

More news:

David Whyte calls for financial advisers to be exempt from CoFi

Julian Fayad believes AI could handle up to 80% of advisor loan deals within seven years

New Zealand’s headline inflation rate fell to 2.2% in the September quarter

Clive Fernandes launches a new AI venture aiming to automate 80% of KiwiSaver client-servicing tasks

Deepfake scams on the rise

Research commissioned by MasterCard has found that 29% of New Zealanders and 18% of NZ businesses have been targeted by deepfake scams in the past year. Deepfake scams use generative artificial intelligence (AI) to impersonate individuals, with the aim of stealing their targets’ money or personal information.

Deepfakes scams can utilise video, images and audio and can look increasingly convincing. Confidence levels in the ability to correctly identify deepfakes are low, with only 12% of respondents confident they would be able to detect a deepfake scam. Deepfakes are eroding trust in public figures and digital platforms, with 41% of individuals being more sceptical towards celebrities and influencers; 61% of kiwis being less trusting of social media platforms; 40% of New Zealanders being less trusting of emails and 37% of respondents being less trusting of phone calls compared to the previous year.

Some steps businesses are taking to address these risks include employing identification verification for accessing sensitive information, offering cybersecurity training and conducting training on financial transactions.

More news:

mySolutions webinar 'How non-PHARMAC drugs are covered in our Private Medical offering' 23 October

Chubb’s Underwriting Click to Chat function is live on Adviser Hub

AIA health premiums increasing from 1 November

AIA release latest version of Underwriting Guide

Link Financial Group appoints Luke Roberts and Quentin Holmes as national growth managers

Tony Vidler talks about the importance of focusing on existing client base

Executive Team changes at Partners Life

From 1 October 2024, there will be some changes to the executive team at Partners Life. Andries van Graan, previously Chief of Adviser Distribution, will be Chief Distribution Officer. Kate Dron, previously Chief and Appointed Actuary, will be Chief Customer Solutions Officer.

Van Graan’s new role will focus on strengthening partnerships with independent financial advisers and working to amplify Partners Life’s customer referral partnership with BNZ.

Dron’s new role will focus on ensuring that Partners Life’s solutions service a wide range of customer needs with a particular focus on enhanced simplicity and accessibility and includes establishing a establishing a business led data, analytics, and insights team.

More news:

nib extends three months free offer until 31 October 2024

mySolutions webinar 'KiwiMonster' 9 October

Financial Advice NZ webinar 'Understanding artificial intelligence in financial services' 16 October

Johny Winstone says advisers offer key emotional support

Legal and regulatory update for the life and health insurance sector

5 Sep 2024 - The Minister for Commerce and Consumer Affairs has announced policy decisions on Financial Services Reforms and indicated the Government intends to introduce a bill in December 2024 addressing the proposed reforms.

For consumer credit legislation the decisions are to:

• Regulate consumer creditors via a market services licence, to simplify and streamline current regulatory arrangements.

• Remove the due diligence duty and attendant personal liability for senior managers and directors.

• Retain the consequences for failure to make initial disclosure or disclosure of agreed changes, but only where the borrower or the FMA can show the failure caused harm.

• Retain the high-cost credit provisions as they are currently (no changes)

• Exempting Buy Now Pay Later providers from the fee requirements in ss 41 and 44A of the CCCFA

For financial services conduct legislation, the decisions are to:

• Simplify and clarify minimum requirements for fair conduct programmes.

• Retain the current open-ended definition of the fair conduct principle (no changes)

• Require the FMA to issue a single licence covering different classes of market services, including for consumer credit where applicable.

• Allow the FMA to rely on an assessment made by the Reserve Bank of New Zealand (RBNZ) in some circumstances.

• Introduce change in control approval requirements.

• Introduce on-site inspection powers for the FMA.

For effective dispute resolution, the decisions are to:

• Enhance the process for reviewing the schemes (noting further work is underway in relation to key performance indicators, scheme governance arrangements and a single front door web portal). "

https://www.beehive.govt.nz/release/improving-access-finance-kiwis

5 Sep 2024 - The FMA publish Jane Brown's speech to the New Zealand Insurance Law Association 2024 Conference. https://www.fma.govt.nz/library/speeches-and-presentations/speech-to-new-zealand-insurance-law-association-2024/

6 Sep 2024 - The Australian Prudential Regulation Authority (APRA) has released for consultation a number of minor updates to the prudential framework for authorised deposit-taking institutions (ADIs), general, life and private health insurers and registrable superannuation entity (RSE) licensees. https://www.apra.gov.au/news-and-publications/apra-consults-on-minor-updates-to-prudential-framework-for-adis-insurers-and

7 Sep 2024 - Tracey Berry, Nicholas Hegan and Mariette van Ryn have been appointed to the Financial Markets Authority Board for a five-year term ending in August 2029, while Chris Swasbrook, who has served as a board member since April 2019, has been reappointed. https://www.goodreturns.co.nz/article/976523586/3-new-fma-board-members.html

9 Sep 2024 - ASIC released its Enforcement and regulatory update (1 January to 30 June 2024), which sets out recent outcomes in enforcement and regulation. https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-releases/24-199mr-asic-to-target-misconduct-in-banking-and-superannuation-sectors/?altTemplate=betanewsroom

9 Sep 2024 - Cabinet has decided to exempt New Zealand's three surviving fintech buy now, pay later service providers from default fee provisions in the Credit Contracts and Consumer Finance Act (CCCFA). https://www.interest.co.nz/personal-finance/129607/gareth-vaughan-questions-whether-fintech-buy-now-pay-later-sector-deserves

10 Sep 2024 - The Financial Markets Authority has published research on the use of Artificial Intelligence (AI) in New Zealand’s financial services sector. The FMA will host a roundtable on 1 October 2024 with the study participants to further explore how AI and GenAI is being used in New Zealand’s financial services and how firms are managing risks. https://www.fma.govt.nz/news/all-releases/media-releases/understanding-artificial-intelligence-in-financial-services/

10 Sep 2024 - New Zealand’s Finance and Expenditure Committee has recommended that the Contracts of Insurance Bill move forward and proposed several key amendments aimed at reshaping the insurance landscape. https://www.insurancebusinessmag.com/nz/news/breaking-news/committee-backs-major-shakeup-of-nz-insurance-laws-504842.aspx

10 Sep 2024 - Minister of Commerce and Consumer Affairs, Hon Andrew Bayly August 2024 diary released with the following potential financial services sector related meetings noted:

• 2 Aug 2024 – FIntech Industry Roundtable (Jason Roberts and Guests)

• 8 Aug 2024 – MEET: Commerce Commission and Commerce and Consumer Affairs Officials (MBIE and Comm Comm Officials)

• 9 Aug 2024 – VISIT: TSB Bank (Kerry Boielle and Larissa Vaughan)

• 15 Aug 2024 – MEET: Payments NZ (Members of the API Centre)

• 19 Aug 2024 – MEET: Commerce Commission Officials (John Small and Brian)

• 20 Aug 2024 – CALL : Chair of Commerce Commission (Dr John Small)

• 21 Aug 2024 – MEET: Retirement Commissioner (Jane Wrightson)

• 28 Aug 2024 – MEET: Commerce Commission - Monthly Meeting (Commerce Commission Officials)

• 29 Aug 2024 – MEET: FMA Board Chair and CE (Craig Stobo, Samantha Barrass and Edwin Metson)

https://www.beehive.govt.nz/sites/default/files/2024-09/Proactive%20Diary%20Release%20Aug%2024%27%20Hon%20Andrew%20Bayly.pdf

10 Sep 2024 - The Australian Prudential Regulation Authority (APRA) has proposed changes to the capital framework for banks in relation to hybrid instruments to simplify and improve the effectiveness of bank capital in a crisis.
APRA is proposing that banks phase out the use of AT1 capital instruments (often called hybrid bonds) and replace them with cheaper and more reliable forms of capital that would absorb losses more effectively in times of stress. The total amount of regulatory capital that APRA requires banks to hold would remain unchanged and banks would remain ‘unquestionably strong’. https://www.apra.gov.au/news-and-publications/apra-proposes-update-to-bank-capital-framework-to-strengthen-crisis

11 Sep 2024 - The Financial Markets Authority has published insights from its supervision of funds that claim to have ethical features. The insights are based off findings from reviewing disclosure documents, advertising, reporting on sustainability progress, and whether investments held by funds align with their sector exclusion policies.  https://www.fma.govt.nz/news/all-releases/media-releases/ethical-investing-disclosure-insights-update/

The FSC release their latest Money & You Report

The FSC have released their latest Money & You Report, ‘Consumer Resilience and the Road to Prosperity’. In all it paints a picture of New Zealander’s who have struggled with the cost-of-living crisis and are feeling financially pressured to the extent they have changed their spending habits, decreased their savings and have concerns about their ongoing ability to service debt.  

Some key findings include:

• 49% are somewhat or very unconfident in the overall economy (up from 45% in 2023), with women older generations and Europeans more likely to be unconfident in the economy. Those who are receiving financial advice are more positive about the impact of the economic climate.

• 94% of respondents are concerned about financial issues, with the cost of living cited as respondents’ top financial concern (66% very concerned), followed by inflation (51% very concerned) and house prices (45% very concerned).

• Financial pressures have resulted in a change in spending habits, with buying cheaper groceries (57%) and cutting back on takeaways (55%) and treat purchases (49%) the most common changes. Concerningly some New Zealanders have reported skipping meals (17%), limiting heating (24%) and avoiding medical treatment or skipping medication (16%).

• 31% of New Zealanders were unhappy with their financial situation this year (up from 22% in 2023 and 25% in 2022).

• There has been a drop in the number of retirees with more than 10 years of retirement savings, and an increase in those with less than one year of current retirement savings.

• 82% hold investments, with KiwiSaver the most likely held investment type.

• Troubling KiwiSaver trends include average member weekly contributions dropping 7.8% (comparing 2023 to 2021); hardship withdrawals are at an all-time high; the KiwiSaver gender gap continues to increase, now sitting at a $7,450 average balance difference between males and females. Most worryingly, the average KiwiSaver member who has been contributing all their working life may not have enough to support them during retirement, according to Massey University Retirement Expenditure Guidelines.

• Those who have struggled to make recent debt payments have been more proactive, with 29% reaching out to their bank (up from 20% in 2023) or speaking to family or friends (38% up from 28%).

 Research was conducted via online survey, with 2,002 respondents completing the data during March 2024.

More news:

Chubb Life Chief Executive Gail Costa is to retire in April 2025

Anna Schubert talks through self-development tips for advisers

Tony Vidler suggests how advisers can create compelling offers

Financial Advice NZ webinar 'The role of emotion and chemistry in client decision-making' 18 September

Clive Fernandes writes of how AI can help personalise financial advice

‘Inspiring Success’ event takes place on 7 November in Auckland

mySolutions webinar 'SimpleWills and your estate' 11 September

Debate whether it is it time to boost KiwiSaver contributions at FSC pre-conference session

Value For Money report highlights top performing ethical KiwiSaver funds

Lloyd Burr writes about how hard it is to start a new bank in NZ

Inland Revenue is proposing to make fees charged for fund management exempt from GST

GPs warn primary care is close to collapse

nib launches an AI-driven symptom checker

nib has launched an AI-driven symptom checker, to help direct kiwis to the appropriate treatment, based on their needs. The symptom checker is available to all nib health policyholders through the my nib app.

Users input their symptoms and the symptom checker gives information on possible conditions as well as when and where to seek care. For a limited time, users advised to book a telehealth GP appointment will be able to get an appointment with Tend’s nationwide online GP service, at no additional cost.

nib New Zealand Chief Executive Officer, Rob Hennin, said

“It’s part of nib’s mission to help Kiwis take a more proactive approach to their health and wellbeing no matter where they are… AI-powered health tools, such as symptom-checkers, can help keep non-urgent medical cases out of hospital emergency departments, relieving some of the pressure on hospitals and emergency department staff, and help ensure people get the right level of medical attention.”

The symptom checker platform was developed by Infermedica and has been used in more than 30 countries, reaching more than 17 million users internationally.

More news:

The ANZIIF Group Life Seminar is on 3 September in Sydney

Level 5 certificate to remain the minimum requirement for advisers

INFINZ seek feedback on 'Shifting the Dial on Diversity' report

New Zealand’s unemployment rate rises to 4.6% in the June quarter

Michael Weston talks about how he wants to take Partners Life forward

Good Returns TV has an interview with Michael Weston, Partners Life CEO. Weston says in the four months he’s been in the role, he’s been spending a lot of time with our advisers, getting to know the regulators and key business partners.

Weston talks about how he’s working to continue the values and the culture of the brand and as he goes forward he’s concentrating on what the next stage of growth for the company will look like, looking to spot unserved needs and ensure Partners Life has the right capabilities in place. He wants to keep focusing on innovation and in terms of the business environment currently, looking at making their solutions simpler and more accessible to a wider range of New Zealanders.

More news:

mySolutions webinar 'New mySolutions Member Benefit - myGrowth Platform' 31 July

Fidelity Life roll out enhanced GP lookup feature for their new E-App

Last week for Fidelity Life's customer engagement initiative

nib offer customers 3 months free on Easy Health, Ultimate Health or Ultimate Health Max policies

Partners Life partner with Banqer for annual Money Month Challenge

David Carney talks about the role of AI in financial advice

Centrix’s latest ‘Credit Indicator Report' shows the number of people behind on payments has increased to 474,000

The Financial Services Federation signs up mortgage advisers as affiliate members

Kiwibank creates content series focusing on first homeownership

Apex Advice is looking for a Financial Adviser – Home Loans

Health Minister replaces Heath NZ’s board of directors with a commissioner in effort to address overspending

AIA releases data on claims by age bracket

 AIA has released information on claims by age bracket – counter to what is often seen in the media about elderly people having the highest health costs, the age bracket that had the most claims in 2023 was those aged 50 – 59. This age group was paid out more than $197 million in 2023 out of $734.8 million in total claims.

Those aged 60 – 69, while still making up a large proportion of total claims, had  a total of more than $139 million in claims paid out, with $65.55 million being on life policies, while those aged 70 and over claimed just $71 million, with $50.52 million being against life policies. The lower level of claims of those aged over 70 could be due to people reducing or dropping their cover as they get older and no longer have dependants to consider or mortgages to pay off.

It comes as no surprise that those aged 20 – 29 had a low level of claims, with only $2.6 million paid in claims against life policies and $7.7 million paid on health policies in this age bracket.

More daily news:

Insurance Business Mag highlights ways AI can impact health insurance

MAS asks Members to vote on a special resolution at the AGM

mySolutions webinar 'Gregor Mansfield, FINLIFE' 19 June

Partners Life webinar 'licensing and advice obligations' 18 & 19 June

The FSC is holding a CRD Series session on 19 June

Whooping cough cases on the rise

New test can detect dementia before symptoms appear