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
RBNZ to publish new statistics on credit flows on 5 December; NZs made more than 1,000 privacy complaints; FMA publish Climate-Related Disclosures insights report; Australia pass two major pieces of privacy law reform; RBNZ’s annual re-weighting of the Trade-Weighted Index; APRA release general & life insurance stats for Sep quarter and respond to consultation; Government launches review of NZ’s competition rules; Retirement Commission budget remains unchanged since 2016; RBNZ welcomes new Financial Policy Remit; FMA to launch a pilot regulatory sandbox; results from RBNZ’s digital cash consultation released; RBNZ release update on business expectations survey; RBNZ release review of how deposit takers support financial inclusion; Minister’s November diary released.
3 Dec 2024 - On 5 December, the RBNZ will publish new statistics from the monthly New Credit Flows Survey. The New Credit Flows Survey collects data from registered banks on new lending during the month and its associated weighted average interest rates. This means from 5 December, monthly data will be available that reflects the actual interest rates being taken by customers month-to-month on new residential mortgage loans.
3 Dec 2024 - New Zealanders made a record 1003 privacy complaints to the Office of the Privacy Commissioner last financial year. Agencies (business and organisations) also reported 864 privacy breaches. https://privacy.org.nz/publications/statements-media-releases/no-one-should-be-happy-we-received-over-1000-privacy-complaints/
4 Dec 2024 - The FMA has published its Climate-Related Disclosures insights report from the first set of entities that were required to file climate statements. https://www.fma.govt.nz/news/all-releases/media-releases/fma-encouraged-by-first-climate-statements/
4 Dec 2024 - Australia has passed two major pieces of privacy law reform: the Australian Privacy and Other Legislation Amendment Bill 2024 and the Online Safety Amendment (Social Media Minimum Age) Bill 2024. https://www.bellgully.com/insights/privacy-update-australian-government-passes-two-major-pieces-of-privacy-law-reform/
4 Dec 2024 - The annual re-weighting of the Trade-Weighted Index (TWI) takes effect on 5 December, with the new weights released. The TWI is a weighted average of the New Zealand dollar against the currencies of New Zealand’s major trading partners. There are 17 currencies included in the TWI basket. The weights are calculated using a fully bilateral trade-weighted methodology. The weight for each currency is based on each country’s direct bilateral trade in goods and services with New Zealand, for the year ended June. https://www.rbnz.govt.nz/hub/news/2024/12/updated-weights-for-trade-weighted-index
5 Dec 2024 - APRA has released its general insurance and life insurance statistical publications for the September 2024 quarter. https://www.apra.gov.au/news-and-publications/apra-releases-quarterly-general-insurance-and-life-insurance-statistics-for
5 Dec 2024 - APRA has released a response to consultation on proposed minor amendments to the prudential framework for authorised deposit-taking institutions (ADIs), insurers and registrable superannuation entity (RSE) licensees. https://www.apra.gov.au/news-and-publications/apra-releases-response-to-consultation-on-minor-amendments-to-prudential-2
5 Dec 2024 - The Government has launched a review of New Zealand’s competition rules, looking to update the competition settings in the Commerce Act to ensure NZ's legal framework is right; and review the governance and effectiveness of the Commerce Commission to ensure NZ's regulatory and enforcement framework is right. https://www.beehive.govt.nz/release/major-review-competition-lift-productivity
6 Dec 2024 - The Retirement Commissioner Jane Wrightson says the Commission’s annual budget has remained unchanged since 2016 and the Commission will be using its financial reserves over the next four years to run the organisation. https://www.interest.co.nz/investing/131130/retirement-commissioner-jane-wrightson-says-commission%E2%80%99s-annual-budget-has
9 Dec 2024 - The Reserve Bank of New Zealand welcomes the new Financial Policy Remit. https://www.rbnz.govt.nz/hub/news/2024/12/rbnz-welcomes-new-financial-policy-remit
10 Dec 2024 - The FMA is launching a pilot “regulatory sandbox” and is asking for applications from interested parties. A regulatory sandbox is a concept which allows firms to test innovative products, services or business models. An initial pilot phase will run from January to July 2025, with a decision on the need for a permanent FMA regulatory sandbox to be made later in the year. https://www.fma.govt.nz/library/opinion/fma-launches-regulatory-sandbox-pilot-for-2025/
10 Dec 2024 - RBNZ's Digital Cash consultation finds cash is crucial and current payment options are not delivering what customers want. https://www.rbnz.govt.nz/hub/news/2024/12/kiwis-say-cash-and-privacy-are-crucial-in-record-digital-cash-consultation-response
10 Dec 2024 - RBNZ has published Tara-ā-Umanga Business Expectations Survey: Development update following third pilot. They plan to run a fourth pilot in January 2025. https://www.rbnz.govt.nz/-/media/project/sites/rbnz/files/publications/bse-background-material/bes-development-update-pilot3.pdf?utm_source=Reserve+Bank+of+New+Zealand&utm_campaign=8347780dcb-Stats+Alert+Business+Survey+of+expectations&utm_medium=email&utm_term=0_-8347780dcb-597079373
11 Dec 2024 - The RBNZ has released a thematic review into how deposit takers support financial inclusion. The review provides an overview of the practices and initiatives deposit takers have introduced to support financial inclusion. https://www.rbnz.govt.nz/hub/news/2024/12/rbnz-thematic-review-identifies-opportunities-to-enhance-financial-inclusion-practices
11 Dec 2024 - Minister of Commerce and Consumer Affairs, Hon Andrew Bayly November 2024 diary released with the following potential financial services sector related meetings noted:
4 Nov 2024 – MEET: Financial Markets Authority (FMA Officials)
5 Nov 2024 – ATTEND: Launch of Australasian Open Banking eco system report (invited guests)
7 Nov 2024 – MEET: NZBA (Roger Beaumont, Miles Erwin)
7 Nov 2024 – CALL: Banking Ombudsman (Miriam Dean)
11 Nov 2024 – MEET: Kiwisaver Roundtable (invited guests)
11 Nov 2024 – MEET: CEO of Financial Services Council (Kirk Hope)
13 Nov 2024 – MEET: FMA (Craig Stobo and Samantha Barrass)
13 Nov 2024 – MEET: MBIE Officials (Suzanne Stew)
20 Nov 2024 – MEET: NZBA (Dan Huggins)
20 Nov 2024 – MEET: MBIE Officials (MBIE officials)
21 Nov 2024 – SPEAK: NZ & Australia Chartered Accontants Conference (conference attendees)
21 Nov 2024 – MEET: Commerce Commission Meeting (Commerce Commission Officials)
22 Nov 2024 – MEET: Securities Industry Association and FMA (Tim Kiefte, Bridget MacDonald, Craig Stobo, Samantha Barrass and SIA members)
27 Nov 2024 – PHONE: Retirement Commissioner (Jane Wrightson )
The FMA releases Consumer Confidence survey
The Financial Markets Authority (FMA) has released their inaugural Consumer Confidence Survey. The survey combines key questions from previous years’ Investor Confidence Survey and KiwiSaver Statements Survey as well as new questions around key focus areas such as fairness, investment scams and confidence in financial markets
The Financial Markets Authority (FMA) has released their inaugural Consumer Confidence Survey. The survey combines key questions from previous years’ Investor Confidence Survey and KiwiSaver Statements Survey as well as new questions around key focus areas such as fairness, investment scams and confidence in financial markets. Key findings include:
98% of New Zealanders have at least one banking product, with 49% considering at least one banking product in the next 12 months
Savings account ownership is up across all demographics
Credit card ownership has decreased 3% while buy-now-pay-later services are up 5% across all demographics
86% of New Zealanders have at least one insurance product, with the average number of insurance products being 2.5 per person
Younger New Zealanders (18 – 34) generally had fewer insurance products compared to other age groups but were more likely to own pet and health insurance
85% of New Zealanders have at least one investment product, with the average number of different investment products owned being 1.8 per person
KiwiSaver membership is highest amongst Chinese and Pacific ethnicities at 87% and 86% respectively
79% of New Zealanders actively chose their own KiwiSaver fund, with females and those aged 45 – 54 years having lower levels of participation in their choice of fund
KiwiSaver satisfaction levels have improved over the last two years, with 60% of Kiwis being quite/very satisfied
Catalysts for kiwis to consider making changes to their KiwiSaver/other investments include better investment returns from another provider (41%) or if their fees seemed high (39%).
FMA Chief Executive Samantha Barrass said
“The results of this survey provide us with valuable insights into how New Zealanders interact with financial markets and their level of confidence in those markets and in the FMA. It also helps us to see emerging trends that require our regulatory attention, so that we can focus our efforts on how we can better regulate for all New Zealanders.”
Additional reports will be published in early 2025 on several themes that emerged in the survey findings in 2025, including the experiences of women Māori, and other minority groups with financial markets; the relationship between knowledge of financial markets and confidence; investment scams and their link to confidence and consumer behaviour; the enablers of investment practices; comparative findings on fairness.
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nib release their top 5 health claims for September 2024
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O’Hagan Homes Loans & Insurances has merged with Apex Advice
Legal and regulatory update for the life and health insurance sector
Kiwibank fined for breaches of the Fair Trading Act; FMA to publish first climate-related disclosures insights report in December; FMA pause work on climate statements in disclosure documents; new FMA podcast released; APRA release quarterly private health insurance data; Privacy week 2025 dates and theme confirmed; FMA release Consumer Confidence Survey.
28 Nov 2024 - Kiwibank has been fined $1.5 million after pleading guilty to 21 breaches of the Fair Trading Act, resulting in overcharges to 35,000 customers totaling $6.8 million. https://comcom.govt.nz/news-and-media/media-releases/2024/systemic-breaches-of-consumer-law-lead-to-$1.5million-fine-for-kiwibank
28 Nov 2024 - The FMA will publish its first climate-related disclosures insights report in early December. It will include findings and areas for improvement based on the reviews of climate statements prepared for reporting periods ended between 31 December 2023 – 31 March 2024. The FMA will be running webinars on Tuesday 10 and Thursday 12 December to discuss the report and answer questions.
28 Nov 2024 - Following consultation in July on proposed guidance for references to climate statements in disclosure documents, the FMA have decided to pause work on this project. https://www.fma.govt.nz/assets/Exemption/Submissions-report-CRD-PDS-proposed-guidance.pdf?utm_medium=email&utm_campaign=FMA%20UPDATE%20NOVEMBER%202024&utm_content=FMA%20UPDATE%20NOVEMBER%202024+CID_ba79ea243bfbf23eb5e123188c21af00&utm_source=FMA%20Campaign%20Monitor%20Emails&utm_term=available%20here
28 Nov 2024 - The FMA release Navigating KiwiSaver Episode 4: KiwiSaver fees. https://www.fma.govt.nz/library/podcast/navigating-kiwisaver-episode-4/
28 Nov 2024 - APRA has released its quarterly private health insurance publication for the September 2024 quarter. https://www.apra.gov.au/news-and-publications/apra-releases-quarterly-private-health-insurance-statistics-for-september-6
29 Nov 2024 - The Office of the Privacy Commissioner has confirmed that Privacy week 2025 will run from the 12-16 May 2025, with the theme "Privacy on Purpose". https://us18.campaign-archive.com/?u=5b61763783257eac3d863f400&id=e5ffb9f447
2 Dec 2024 - The FMA have released the results of its first Consumer Confidence Survey. Findings included 98% of kiwis have at least one banking product; credit card ownership is down 3% while buy-now-pay-later is up 5%; 86% of all kiwis have at least one insurance product; 85% of NZers have at least one investment product. https://www.fma.govt.nz/news/all-releases/media-releases/inaugural-consumer-confidence-survey/
Legal and regulatory update for the life and health insurance sector
ASIC announce they will consult on key regulatory guides next year; FMA held roundtable with NZ’s non-bank deposit taker sector; Privacy Commissioner publishes annual report; APRA & ASIC release observations from the banking industry's implementation of the Financial Accountability Regime.
25 Nov 2024 - In 2025, ASIC will consult with stakeholders to update some key regulatory guides (RGs), taking into account law reform, insights from case law about the provisions and other relevant issues. The RGs that they intend to update next year, include:
Regulatory Guide 53 The use of past performance in promotional material
Regulatory Guide 168 Disclosure: Product Disclosure Statements (and other disclosure obligations)
Regulatory Guide 181 Licensing: Managing conflicts of interest
Regulatory Guide 183 Approval of financial services codes of conduct, and
Regulatory Guide 234 Advertising financial products and services (including credit): Good practice guidance.
26 Nov 2024 - The FMA held a roundtable with New Zealand’s Non-Bank Deposit Taker sector. https://www.fma.govt.nz/library/opinion/non-bank-deposit-taker-sector-roundtable/
26 Nov 2024 - Annual Report of the Privacy Commissioner 2024 published. https://privacy.org.nz/publications/corporate-reports/annual-report-of-the-privacy-commissioner-2024/
27 Nov 2024 - APRA and ASIC have published a letter containing observations on registration and notification lodgements made since the Financial Accountability Regime (FAR) commenced for the banking industry. The letter identifies areas that require further consideration by banking entities and reiterates specific aspects, consistent with previously released FAR guidance, to entities across the banking, insurance and superannuation industries. https://www.apra.gov.au/news-and-publications/apra-and-asic-release-observations-from-banking-industrys-implementation-of
Fidelity Life announce incoming Board Chair
Fidelity Life has announced that Scott Pickering will take up the reins as chair of its Board of Directors, effective 1 January 2025.
Fidelity Life has announced that Scott Pickering will take up the reins as chair of its Board of Directors, effective 1 January 2025. Pickering joined the Fidelity Life board in July this year and holds other roles on boards at Evolution Healthcare, Kiwibank, Insurance Australia Group, IAG New Zealand, Engage Consulting and Bowls New Zealand as well as being an advisor to HealthNow and Bain & Co.
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AIA NZ achieves Advanced GenderTick Status; Westpac reaccredited with the Advanced GenderTick
Winners at the Haven Awards 2024 announced
Data shows $194 million was lost to bank scams in the year ending September 30
The Retirement Commission launches National Strategy for Financial Capability 2025–2027
KiwiSaver assets grow to $117.6 billion in the third quarter of this year
Bell Gully writes of the rise of generative AI, including an overview of the relevant NZ statute
Poll finds the cost of delivering advice is the biggest challenge
FMA announces more than $215 million returned to customers through remediation
The Financial Markets Authority (FMA) has released its annual report for the year ended 30 June 2024, including information on the money being returned to customers as a result of remediation activity stemming from the Conduct and Culture review.
The Financial Markets Authority (FMA) has released its annual report for the year ended 30 June 2024. One of the most interesting findings to come from the annual report was that $215 million has been returned, or is in the process of being returned, to customers as a result of remediation activity stemming from the Conduct and Culture review of banks and life insurers carried out by the Reserve Bank of New Zealand (RBNZ) and the FMA between 2018 and 2019. As at June 2024, 1.585 million affected customers had been identified. You can read about some of the filings from this year here.
The FMA achieved six out of nine of its Statement of Performance Expectations. Some key achievements included several penalty decisions for fair dealing provision breaches, opening licensing for the Conduct of Financial Institutions (CoFI) regime and producing the first Financial Advice Provider Monitoring Insights Report.
The FMA have also released the results of their Ease of Doing Business Survey which reports on stakeholder and industry participants views on the effectiveness of their interactions with the FMA.
94% agree financial markets are effectively regulated
85% agree the FMA supports market integrity
84% agree that FMA communications is relevant to their sector
75% agree the FMA helps raise the standards of market conduct
80% agree that communications help them understand the FMA’s approach to regulation
77% agree communications help them understand the FMA’s expectations of them
53% agree it’s easy doing business with the FMA
More news:
The Banking Ombudsman Scheme has published results from its five-year review
Legal and regulatory update for the life and health insurance sector
FMA publish speech by CEO Samantha Barrass; RBNZ publish speech by Assistant Governor Karen Silk; Hon Andrew Bayly’s September diary released; RBNZ publish bulletin on banking funding developments; The Budapest Convention and Related Matters Legislation Amendment Bill had its first reading; FMA publishes guidance; APRA publish Annual Report; The committee stage of the Pae Ora (Healthy Futures) (Improving Mental Health Outcomes) Amendment Bill was completed; new Privacy complaints guide; RBNZ release voluntary Climate-related Disclosure; ASIC announces new appointments; The Contracts of Insurance Bill was read a second time; Commerce Commission Commissioner reappointed; RBNZ delay November FSR.
15 oct 2024 - The FMA has published the speech by FMA Chief Executive Samantha Barrass at the Institute of Financial Professionals New Zealand Conference 2024. https://www.fma.govt.nz/library/speeches-and-presentations/speech-by-samantha-barrass-at-infinz-20242024/
16 Oct 2024 - RBNZ publish Assistant Governor Karen Silk's speech 'Transmission of monetary policy to financial conditions' from the Citi Australia and New Zealand Investment Conference. https://www.rbnz.govt.nz/hub/news/2024/10/transmission-of-monetary-policy-to-financial-conditions
16 Oct 2024 - Minister of Commerce and Consumer Affairs, Hon Andrew Bayly August 2024 diary released with the following potential financial services sector related meetings noted:
4 Sep 2024 – ATTEND: Financial Education Roundtable (invitees)
4 Sep 2024 – SPEAK: Financial Services Council Annual Conference Gala Dinner (conference delegates)
11 Sep 2024 – MEET: NZBA (Roger Beaumont)
13 Sep 2024 – MEET: BNZ CEO (Dan Huggins)
16 Sep 2024 – ATTEND: NZ Banking Association Council Meeting (Council Members)
23 Sep 2024 – ATTEND: Westpac Einvoicing customer event (Invited guests)
23 Sep 2024 – CALL: FMA CEO (Samantha Barrass)
23 Sep 2024 – ATTEND: Financial Service Federation Dinner (Invited guests)
24 Sep 2024 – MEET: Privacy Commissioner (Michael Webster)
24 Sep 2024 – ZOOM: XRB (Michelle Embling, and April Mackenzie)
25 Sep 2024 – MEET: Banking Ombudsman (Nicola Sladden)
26 Sep 2024 – MEET: Commerce Commission (Commerce Commission Officials)
26 Sep 2024 – MEET: NZBA (Roger Beaumont and Miles Erwin)
27 Sep 2024 – CALL: Westpac CEO (Catherine McGrath)
30 Sep 2024 – ZOOM: Commerce Commission (Commerce Commission Officials)
16 Oct 2024 - RBNZ publish a Bulletin which provides an overview of bank funding and mortgage rate pricing developments in recent years. https://www.rbnz.govt.nz/hub/news/2024/10/monetary-policy-pass-through-to-bank-funding-costs-and-mortgage-rates
16 Oct 2024 - The Budapest Convention and Related Matters Legislation Amendment Bill had its first reading and was referred to Select Committee. https://bills.parliament.nz/v/6/f2d3b46e-56c2-41cd-0edd-08dcdb5e62cc?Tab=history
16 Oct 2024 - The FMA has published guidance which explains their interpretation of the law, to promote consistent market practices and ensure the requirements of section 212 (Initial steps in winding up of registered scheme) and section 213 (Winding-up report) of the Financial Markets Conduct Act 2013 (FMC Act) are met. https://www.fma.govt.nz/library/guidance-library/winding-up-requirements-for-registered-schemes/
16 Oct 2024 - The Australian Prudential Regulation Authority (APRA) has published its Annual Report for the 2023-24 financial year. https://www.apra.gov.au/news-and-publications/apra-publishes-2023-24-annual-report
16 Oct 2024 - The committee stage of the Pae Ora (Healthy Futures) (Improving Mental Health Outcomes) Amendment Bill was completed. https://www.parliament.nz/en/pb/daily-progress-in-the-house/daily-progress-for-wednesday-16-october-2024/
16 Oct 2024 - The office of the Privacy Commissioner has published 'Handling privacy complaints: a step-by-step guide'. https://privacy.org.nz/publications/guidance-resources/handling-privacy-complaints-a-step-by-step-guide/
17 Oct 2024 - The RBNZ has released its first voluntary Climate-related Disclosure - Ngā Whakapuaki e Pā ana ki te Āhuarangi for FY2023/24, outlining their progress in understanding, monitoring, and managing climate-related risks. https://www.rbnz.govt.nz/hub/publications/reports/2024/climate-related-disclosure/data/climate-related-disclosure-2023-24
17 Oct 2024 - ASIC announce appointments to the ASIC Executive Leadership team: Peter Soros as Executive Director Regulation and Supervision; Chris Savundra to the role of Executive Director Enforcement and Compliance. https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-releases/24-226mr-appointments-to-the-asic-executive-leadership-team/?altTemplate=betanewsroom
17 Oct 2024 - The Contracts of Insurance Bill was read a second time. https://bills.parliament.nz/v/6/019dad64-3f9e-46b8-5cd9-08dc67f794e8?Tab=history
18 Oct 2024 - The Ministry of Business, Innovation and Employment (MBIE) has confirmed that Dr Derek Johnston has been reappointed for a second term as a Commissioner at the Commerce Commission. https://www.mbie.govt.nz/about/news/dr-derek-johnston-reappointed-to-the-commerce-commission
18 Oct 2024 - The Reserve Bank of New Zealand’s November Financial Stability Report (FSR) for 2024 has been moved to 5 November. https://www.rbnz.govt.nz/hub/news/2024/10/financial-stability-report-moved-to-5-november
What does a business version of the healthy futures report mean?
Southern Cross’s business edition of the 2024 Healthy Futures Report focuses on employee health and wellbeing.
We took a look at Southern Cross’s business edition of the 2024 Healthy Futures Report, which focuses on employee health and wellbeing. There are clear links between wealth and health, as the old saying has it. Whether one causes the other and in which direction the arrow of causality points is unexplored. We think it’s probably more complicated than this simple pairing of factors, although if someone becomes wealthy, they often become healthier. Likewise, if someone has the misfortune to become chronically ill, they usually get poorer. But these two are probably joined by other factors which may also have some power to affect outcomes – like education while young, health while a child, and current environment.
What employers can do to help is limited – but is appreciated by staff. At Quality Product Research Limited we offer seven of the eleven key suggestions made (soon to be expanded to eight) – we like that we can do that – but people use or do not use them pretty much as they please.
Key takeaways for us from the survey results:
89% of respondents said it was important to them to work for a company that supports the health and wellbeing of their staff.
55% of respondents’ employers were doing well in supporting their employees.
The top ten initiatives employers could invest in were wellbeing leave (36%), lunch or break room (29%), flu vaccinations (26%), healthy food options (25%), activities promoting good mental health (23%), workplace massage (23%), Employee Assistance Programme (22%), health assessments (21%), subsidised membership to off-site facilities (21%) and stress management programmes (20%).
88% of employees think having a good work-life balance is important, with a third considering taking steps to improve their work-life balance.
Making use of flexible working hours (43%) and switching off from work when finished for the day (43%) were the most common means of managing work-life balance. Conversely, having a high work load (60%), financial pressures (40%) and not having flexible working hours (40%) were cited as most commonly as reasons for poor work-life balance.
51% of workplaces offer flexible working arrangements, down from 54% in 2022; 60% of employees make use of flexible working hours most weeks and an additional 26% utilise it sometimes.
Only 45% of kiwis rate themselves as happy with their financial situation; 91% cite cost of living as one of their top concerns and 58% worry about not having enough money to support themselves or their families.
84% of New Zealanders are concerned about not having good, affordable access to healthcare, up 8% from 2022.
Kiwis don’t feel they are getting enough sleep (60%) or exercise (62%).
New Zealanders without health insurance were more likely to be less happy with their health, financial situation, mental wellbeing, fitness levels, weight of themselves and their children, exercised less on average and were more likely to be stressed.
Southern Cross highlight a series of initiatives workplaces could take to improve employee wellbeing, including:
offering education on stress management and financial management;
offering free fruit or healthy food in breakrooms;
encouraging employees to make use of flexible working if it’s offered;
offering health assessments;
educating employees on the importance of flu vaccinations;
offer opportunities for physical exercise, through work place team sports, sports day or subsidies for gyms or exercise equipment;
encouraging employees to take their annual leave;
training leaders to identify those at risk of burn-out;
offering wellbeing leave;
providing employee assistance programmes and educating employees on what it is and hot to use it;
offering subsidised health insurance.
1,463 employees were surveyed for this report in March 2024.
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The Monetary Policy Committee cut the Official Cash Rate to 4.75%
BNZ has launched a new security feature aimed at combating online scams
KiwiSaver determined to be competitive
The latest Melville Jessup Weaver analysis has determined that KiwiSaver is statistically competitive.
The latest Melville Jessup Weaver analysis has determined that KiwiSaver is statistically competitive. Competitiveness, as measured by the Herfindahl-Hirschman Index (HHI), improved slightly year on year. There are 38 schemes and 34 providers available for kiwis to choose from, with the three largest owners (ANZ, ASB and Fisher) accounting for around half of scheme members and assets. There was a slight shift in favour of providers outside the 10 largest, who expanded their market share by 0.5% during the 12 months to March 31.
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FMA acts against misleading customers
The Financial Markets Authority (FMA) has been busy, with the news this week full of stories of AA Insurance New Zealand Ltd (AAI) being ordered to pay a penalty and civil proceedings lodged against ASB Bank Limited (ASB).
The Financial Markets Authority (FMA) has been busy, with the news this week full of stories of AA Insurance New Zealand Ltd (AAI) being ordered to pay a penalty and civil proceedings lodged against ASB Bank Limited (ASB).
AAI was ordered to pay a penalty of $6.175 million, for failing to apply multi-policy and membership discounts, as well as guaranteed no claims bonuses.
AAI was found to have misled customers about its multi policy discount offer in marketing material – marketing material said existing policy holders who added another policy would receive the discount immediately; however, AAI’s systems only applied the discount once the original policy came up for renewal. This issue affected 112,463 customers, who were overcharged approximately $4.89 million. In addition, AAI failed to apply discounts promised to NZAA members, affecting 90,129 customers who were overcharged approximately $2.95 million in total.
AAI were also found to have misrepresented that certain eligible customers would receive its guaranteed no claims bonus “for life”. Up until December 2011 AAI offered the bonus for each customer’s lifetime, as long as they remained insured with AAI. From 2012 the benefit only applied to the policy’s lifetime – yet AAI marketing continued to use the “for life” language without limitation. This affected 17,973 eligible customers, who were overcharged approximately $3.28 million.
Margot Gatland, FMA Head of Enforcement, said of the AAI judgement,
“AAI’s systems proved to be inadequate and its marketing was not kept in line with internal policies. This judgment sends a strong message to the industry that companies need to ensure their systems and processes are fit for purpose and customers’ interests put first.”
The FMA has filed civil proceedings against ASB for allegedly making false or misleading representations in regards to insurance products and banking services. Similar to AAI, ASB allegedly failed to apply multi policy discounts on ASB-branded insurance products, due to errors in the manual process at point of sale. Another issue arose when ASB staff misinformed customers with policies of insurance for caravans and trailers that they were eligible for the multi policy discount, despite those policies being ineligible. ASB also allegedly failed to consistently apply fee exemptions to certain customer accounts with access to ASB’s Fastnet Banking service, again due to failings in the manual processes. Between April 2014 and May 2022, a total of 23,062 customers were affected by the multi policy discount issue with the total value of overcharged premiums being approximately $2.8 million. During the same period, 2,435 customers were affected by the Fastnet Banking issue, totalling approximately $1,147,276 in overcharges. ASB has completed remediation work on both causes of action and has repaid affected customers, including use of money interest, and they self-reported the errors to the FMA.
Both of these cases demonstrate the willingness of the FMA to prosecute organisations who don’t fulfil their obligations to customers. They also highlight the importance of language in customer communications being crystal clear and that it is essential organisations have the systems-wide processes and checks in place to honour any discounts and offers made to customers. The FMA expect that if you make commitments to customers, you need to keep them, which we think is fair enough.
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