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
APRA announces changes to internal structure and publishes latest Corporate Plan; The FMA will release a Climate-related Disclosures Monitoring Report in November; The FMA release series of videos to kickstart conversations around money; The FMA's Fairness Research roundtable with smaller-sized firms to take place in September; FAPs must submit their annual regulatory returns by 30 September; FMA will consult on questions they propose to ask in regulatory returns for financial institutions; Annual Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Conference 30 & 31 October.
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
Legal and regulatory update for the life and health insurance sector
Commerce Commission’s preliminary view on Payments NZ developing framework relating to provision of API; ASIC issue Cost recovery Implementation Statement; XRB publish interim report on Climate-Related Disclosure Framework evaluation; maximum compensation for complaints to rise; APA & ASIC publish info to help insurers prepare for the start of the Financial Accountability Regime; Privacy Commissioner publishes Statement of Performance Expectations and launches free online toolkit.
1 Jul 2024 - The Commerce Commission has reached a preliminary view that it should grant conditional authorisation to Payments NZ Limited to work with current and future API providers (i.e., banks) and third parties (e.g., fintechs) to develop and apply a partnering framework relating to the provision of API services by API providers to third parties. https://comcom.govt.nz/news-and-media/media-releases/2024/commerce-commission-issues-draft-determination-on-payments-new-zealands-application-to-further-develop-its-open-banking-framework
8 Jul 2024 - ASIC issued its 2023-24 Cost Recovery Implementation Statement (CRIS). The CRIS outlines estimated regulatory costs and levies for each industry subsector to help entities plan and budget for levies and fees to be charged. https://asic.gov.au/about-asic/news-centre/news-items/asic-releases-estimated-industry-funding-levies-for-2023-24/
11 Jul 2024 - The External Reporting Board publish an interim report on New Zealand Climate-Related Disclosure Framework evaluation. https://www.xrb.govt.nz/news/insights/aotearoa-new-zealand-climate-related-disclosure-framework-evaluation-interim-report-published/
11 Jul 2024 - Financial limits for complaints are being raised across the four approved financial dispute resolution schemes from 18 July 2024. The Banking Ombudsman Scheme, the Insurance & Financial Services Ombudsman Scheme, Financial Services Complaints – a Financial Ombudsman Service, and the Financial Dispute Resolution Service will have the same thresholds for complaint values and compensation, providing consistency for consumers across the sector. The key change is raising the maximum compensation to $500,000 +GST. https://fdrs.org.nz/resources/news/increased-compensation-limits-for-financial-disputes/
11 Jul 2024 - The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have published new information to help insurers and superannuation trustees prepare for the commencement of the Financial Accountability Regime (FAR). The FAR already applies to the banking industry and takes effect for the insurance and superannuation industries from 15 March 2025.
New information includes:
an amendment to the Regulator rules, which prescribes key functions information for inclusion in the FAR register of accountable persons for insurance and superannuation industries; see Financial Accountability Regime Regulator Rules Amendment Instrument No. 1 of 2024 and Financial Accountability Regime Act (Information for register) Regulator Rules 2024; and
a joint ASIC and APRA letter summarising key issues raised during consultation and their response, including the concept and application of key functions.
12 Jul 2024 - The office of the Privacy Commissioner has published their Statement of Performance Expectations 2024-2025. https://privacy.org.nz/publications/corporate-reports/statement-of-performance-expectations-2024-2025/
15 Jul 2024 - The Office of the Privacy Commissioner has launched a free online toolkit today to help businesses and organisations do privacy well. https://privacy.org.nz/publications/statements-media-releases/new-privacy-toolkit-set-to-support-business-and-organisations/
Legal and regulatory update for the life and health insurance sector
New guides to help people understand Climate-related Disclosures; APRA release new digital prudential framework; FMA publish auditor regulation and oversight plan; reappointment of RBNZ Chair; feedback sought on Financial Advice Code; FMA spotlight KiwiSaver fund types; Minister of Commerce & Consumer Affairs May diary released.
19 Jun 2024 - The Financial Markets Authority and the External Reporting Board have jointly produced a set of guides designed to help people understand the Climate-related Disclosures (CRD) regime and the information being provided in climate statements which are now starting to be published by climate reporting entities. https://financialmarketsauthority.cmail20.com/t/r-l-tdgjjx-btuitpxk-y/
19 Jun 2024 - The Australian Prudential Regulation Authority (APRA) has announced the release of the new digital prudential framework in the form of the "Prudential Handbook". The Handbook brings all APRA's prudential standards, guidance and supporting information into one place; presents them in a digital format that can be easily navigated and searched; and caters to a range of different users across regulated industries and in the broader community. https://www.apra.gov.au/news-and-publications/apra-releases-new-digital-prudential-handbook
20 Jun 2024 - The Financial Markets Authority has published its Auditor Regulation and Oversight Plan 2024-2027. The plan sets out how the FMA aims to improve the audit quality of Financial Markets Conduct reporting entities. https://www.fma.govt.nz/news/all-releases/media-releases/fma-publishes-auditor-regulation-and-oversight-plan-2024-2027/
20 Jun 2024 - Professor Neil Quigley has been reappointed as Chair of the Reserve Bank of New Zealand Board for a further term of two years, until 30 June 2026. https://www.beehive.govt.nz/release/reserve-bank-chair-reappointed
21 Jun 2024 - The Financial Advice Code Committee is seeking feedback on proposed amendments to the standards of competence, knowledge, and skill in the Financial Advice Code. https://financialadvicecode.govt.nz/2024/06/21/update-21-june-2024-consultation-on-financial-advice-competence-knowledge-and-skill/
24 Jun 2024 - The FMA's new ‘Spotlight’ series looks at the different kinds of KiwiSaver funds and explores how they work. https://www.fma.govt.nz/library/articles/spotlight-on-conservative-funds/
24 Jun 2024 - Minister of Commerce and Consumer Affairs, Hon Andrew Bayly May 2024 diary released with the following potential financial services sector related meeting noted:
2 May 2024 – MEET: FMA (FMA officials)
7 May 2024 – MEET: Commerce Commission Board
10 May 2024 – MEET: Institute of Financial Professionals NZ (Board members)
10 May 2024 –MEET: Kiwisaver Stakeholders Roundtable Lunch
16 May 2024 – ATTEND: Institute of Finance Professionals NZ Awards Dinner
17 May 2024 -CALL: Retirement Commissioner (Jane Wrightson)
22 May 2024 – MEET: External Reporting Board (Alex Burton, Michele Embling)
23 May 2024 – MEET: Commerce Commission (Commerce Commission Officials)
Contracts of Insurance Bill
Commerce and Consumer Affairs Minister Andrew Bayly talks about his three focus points; ombudsman welcomes changes; and where to find more information on how the Bill could affect you.
Commerce and Consumer Affairs Minister Andrew Bayly has said that insurance law reforms are “long overdue”, with some laws over 100 years old. Bayly has said his three focus points for the new Contracts of Insurance Bill are to make it easier for consumers to get insurance, for consumers to better understand what they’ve signed up for and for consumers to get paid out more quickly. Bayly has said the government intend to pass the Bill before the end of 2024.
“… Many consumers don’t understand what information they are supposed to tell their insurer, and the consequences if they don’t disclose this information.
Forgetting to tell the insurer something regarded as being material to the risk of providing a consumer with insurance (i.e. whether the insurer would have provided cover or not, and on what terms) can be fatal.
I’m pleased that this law change will require insurers to ask clear and relevant questions, making it easier for consumers to know what information they have to provide.”
Submissions on the Bill are open until 3 June 2024. The Financial Services Council (FSC) is urging members to feedback and has circulated an industry submission process document.
We think that all the questions adviser-focused insurers ask are clear and relevant and that in a full underwriting environment it is clear to customers what they should be disclosing. But this is not the full scope of the changes that the law will bring in. Bell Gully’s comment covers this well:
“Most submitters welcomed the overall approach taken in the exposure draft, which proposed to consolidate, modernise and clarify a number of outdated statutes into one primary statute governing insurance policies generally, as well as the specific relationship between insurers and their customers. The Bill also proposed to bring about significant changes in the law of insurance in New Zealand – particularly relating to the duty of disclosure owed by insureds, the duty of utmost good faith, the remedies available to a party who has a claim against an insolvent insured, and the application of the unfair contract terms regime to insurance policies. The details of some of these substantive changes were met with resistance, including in our submission, primarily due to concerns that the reforms may create significant uncertainty for both insureds and insurers.”
For more details on the content of the Bill, we suggest that you check out their summary here. Steve Wright also outlines seven potential changes facing advisers and insurers here.
Next week is Privacy Week
Privacy Week 2024 runs from May 13 – 17. This year, the office of the Privacy Commissioner have chosen the theme ‘busting privacy myths’. There are a range of online events you can attend, and they will all be recorded and added to their YouTube channel.
Privacy Week 2024 runs from May 13 – 17. This year, the office of the Privacy Commissioner have chosen the theme ‘busting privacy myths’. There are a range of online events you can attend, and they will all be recorded and added to their YouTube channel.
Monday 13 May
11:00am - Myth: Māori data sovereignty is too hard – introductory
1.00pm - A hacker's view of data breaches – introductory
Tuesday 14 May
8.30am - In-person IAPP Knowledge Net event – Wellington
10.30am - Busting myths about privacy and cyber security – introductory
12.00pm - Biometrics and you – intermediate
3:30pm - Sharing personal information: Why aren’t we sharing when we have authority to do so? – Intermediate.
Wednesday 15 May
9.30am - If I'm not doing anything wrong, what do I have to hide? – Introductory
10.45am - Safeguarding children and young people's privacy in New Zealand – Introductory
12pm - Resolving Privacy Complaints: Internal Resolution and Working with OPC – Introductory
2pm - What’s missing from the conversation on AI? – Intermediate
Thursday 16 May
9.15am - Privacy for Charities and Not-for-Profits: tips and tricks - introductory
10.30am - All privacy breaches need to be reported to the Privacy Commissioner? – intermediate
1.15pm - Managing Privacy in the Data & Generative AI Era – Intermediate
2.30pm - Young people don't care about Privacy - Debunking the myth – Introductory
Friday 17 May
9.00am - Sharenting, Children and Privacy – The fine line between 'cute' and 'concerning'
10.30am - Privacy is More than Compliance: Transforming Privacy into a Strategic Business Advantage - Advanced
12.00pm - Data Privacy: Protecting Children in the Digital Age – Introductory
2.00pm - My DNA will only be used in this way - busting privacy myths about DNA - Introductory
There is a range of collateral available for you to put on your website or social media or pop up around the office here and a quiz you can take with your team available here.
More daily news:
nib offers respondents to Workplace Wellbeing Survey a chance to win
ICNZ has welcomed the first reading of the Contracts of Insurance Bill
The government calls for public submissions on the Contracts of Insurance Bill
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
Naomi Ballantyne to retire from Partners Life
Naomi Ballantyne has announced her intention to retire from Partners Life. Ballantyne will remain as Managing Director until her planned departure after the completion of the March 2024 financial year end. Ballantyne plans to undertake some consulting work for the global Dai-ichi Life business after her departure.
Ballantyne has been with Partners Life 12 years, after founding it in 2011. Dai-Ichi Life purchased Partners Group Holdings for $1 billion in August 2022.
More daily news:
nib unveils more details of their Life and Living policies, available from 1 June
Southern Cross offers 2 months free life insurance
Some FAPs have unnecessary duplication of information when complying with disclosure regulations
FMA executive director Paul Gregory challenges the market to substantiate its green claims
AIA NZ has been awarded the Accessibility Tick