Government announces reforms to strengthen NZ’s capital markets

The Government has announced a package of reforms to help ensure New Zealand’s capital markets are working to support a productive economy. The Government is making it easier for businesses to raise money from the public by making it voluntary to provide forward-looking financial information as part of an Initial Public Offering of shares. These changes are expected to be in place by May 2025.

The Government has also opened consultation on two proposals: enabling KiwiSaver investment in private assets; and potential adjustments to the climate-related disclosures regime. Consultation closes 14 February 2025.

The Financial Services Council (FSC) has expressed strong support for enabling KiwiSaver funds to invest in unlisted assets. FSC CEO Kirk Hope said,

“By enabling KiwiSaver investments in unlisted assets, such as infrastructure projects and innovative New Zealand businesses, we can unlock substantial capital for domestic growth.”

“This reform will not only provide Kiwi businesses with much-needed capital to innovate and expand but the opportunity of greater diversification for KiwiSaver.”

Some financial advisers warn that regulators need to get on board with the proposals, however. At a recent event we held in conjunction with the Financial Services Council, advisers asked questions about whether the Financial Markets Authority would be supportive of fund managers choosing to invest more in private assets and infrastructure projects which tend to be illiquid in nature. We think that these are good questions, and the answers will be highly sensitive to the context in each fund: for example, the scale of the investments relative to the total fund size and the liquidity of other assets, and the ages, balances, and probable withdrawal patterns of investing members.

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Advice Link has appointed of a new general manager Sébastien Pierre

Tony Vidler writes of the importance of soft skills

Government announces hikes to ACC levies

Chapter Zero discusses experiences from year one of New Zealand's mandatory climate reporting

Significant increase in cyber incidents across New Zealand in Q3 2024

Legal and regulatory update for the life and health insurance sector

11 Dec 2024 - APRA has released its quarterly private health insurance performance statistical publication for the September 2024 quarter.  https://www.apra.gov.au/news-and-publications/apra-releases-quarterly-private-health-insurance-performance-statistics-for

12 Dec 2024 - RBNZ has issued the second amendment to the Interim Solvency Standard 2023, which will take effect for all relevant insurers from 1 March 2025. https://www.rbnz.govt.nz/hub/news/2024/12/second-amendment-to-insurance-interim-solvency-standard-issued

13 Dec 2024 - The FSC has come out in support of the Government’s announcement to allow KiwiSaver funds to be invested in unlisted assets. https://blog.fsc.org.nz/media-statement-13-december-2024

13 Dec 2024 - The Government is progressing a package of reforms to help ensure our capital markets are working to support a productive economy. As a first step, the Government is making it easier for businesses to raise money from the public by making it voluntary to provide forward-looking financial information as part of an Initial Public Offering of shares. This will give businesses more flexibility and bring New Zealand closer in line with other countries like Australia. These changes are expected to be in place by May 2025. The Government has also opened consultation on two specific proposals that will help create more effective capital markets: Enabling KiwiSaver investment in private assets; and potential adjustments to the climate-related disclosures regime. https://www.mbie.govt.nz/about/news/strengthening-new-zealands-capital-markets

13 Dec 2024 - APRA has released its annual private health insurance statistical publication for the 2023-2024 year. https://www.apra.gov.au/news-and-publications/apra-releases-enhanced-annual-private-health-insurance-statistics-for-2023

13 Dec 2024 - The Council of Financial Regulators (CoFR) has published their Regulatory Initiatives Calendar for Q4 2024. https://www.cofr.govt.nz/key-documents/regulatory-initiatives-calendar.html

16 Dec 2024 - The XRB has published a document that provides: information on their plan to consult on Aotearoa New Zealand Climate Standards (NZ CS), focusing on the topic of differential climate-related reporting and context to readers of the MBIE discussion document Adjustments to the climate-related disclosures regime. https://www.xrb.govt.nz/dmsdocument/5355/

Partners Life appoints new Chief Financial Officer

Mark Schollum has been appointed as Partners Life's new chief financial officer. Schollum is currently Chief Financial Officer at Chubb Life New Zealand and has held a variety of roles in the life insurance industry in New Zealand and internationally. He is qualified as a Chartered Accountant and is a member of the New Zealand Institute of Directors. Schollum will start his new role in March next year.

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Bell Gully publishes guide to support businesses’ strategies and help them meet climate reporting obligations

Study finds typical spending slow-downs post age 65 mean could mean smaller lump sum savings needed for retirement

Australia is set to introduce a ‘new class’ of financial advisers

New Chair of Southern Cross Medical Care Society appointed

Chris Black has been appointed Chair of Southern Cross Medical Care Society (Health Society). Black joined the Health Society Board in 2021. Black has held a range of leadership positions over the course of his career, including Chief Executive of Farmers Mutual Group, ICNZ President and Commissioner of the Insurance & Financial Services Ombudsman Scheme. He is currently a Trustee of the Southern Cross Health Trust, Chair of the Natural Hazards Commission and Rabobank New Zealand, and a Trustee of the Mental Health Foundation.

Outgoing Chair Murray Jordan retired at the organisation’s Annual General Meeting (AGM) last week.

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Legal and regulatory update for the life and health insurance sector

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 )

https://www.beehive.govt.nz/sites/default/files/2024-12/Proactive%20Diary%20Release%20Nov%2024%27%20Hon%20Andrew%20Bayly.pdf

FSC’s FAP round table breakfast with the FMA

Quality Product Research are sponsors of the Financial Services Council’s (FSC's) FAP round table breakfast with the Financial Markets Authority (FMA) last month. Several of our team were there, including Aneel Ravji, AdviceTech Lead, Kelly Pulham, National Partnerships Lead, and Russell Hutchinson, Research Director.

The FMA covered how the new regime is working, approaches to enforcement and other initiatives. Attendees were taken through the background and given an overview of the Conduct of Financial Institutions (CoFI) regime.  Other topics included observations on remediations, fair conduct programmes and an overview of the CoFI intermediated distribution guide. Russell Hutchinson facilitated a lively Q&A session.

Here's a few snaps from the day. We highly recommend you attend the FSC round tables if you get the chance, they always make for an interesting and engaging start to the day.

Pictured, from the Financial Markets Authority, from left to right: Michael Hewes, Director, Deposit Taking, Insurance and Advice; Anna Jared, Technical Specialist – Deposit Taking, Insurance & Advice; Kyla Bottriell, Senior Adviser, External Relations; and Romil Ghelani, Head of Financial Advice

Russell Hutchinson, Director at Quality Product Research Ltd, facilitates a Q&A session.

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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. 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

AIA campaign offering up to three months off premiums extended to 31 March 2025

AIAHub Resource Hub now available to delegated users

AIA's latest CPI rate is 2.2%

The FSC is gathering feedback on life after licensing

O’Hagan Homes Loans & Insurances has merged with Apex Advice

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The FSC has released its latest Money & You research

The Financial Services Council (FSC) has released their latest research report, Money & You: Managing Risk Through Challenging Times, which explores the attitudes of New Zealanders towards risk management. Some of the key findings are below.

• Only 41% of respondents had life insurance, 39% had health/medical insurance, 23% had trauma/critical illness insurance, 18% had total and permanent disability insurance.

• For the 12 months to 30 September 2024, FSC industry data showed 1,521,740 health insurance policies and 4,145,287 life insurance products (one person may have more than one policy e.g. life insurance, income protection insurance and total and permanent disability insurance policies).

• The majority (66%) who have life and health insurance consider it value for money.

• The biggest drivers of taking out life and health insurance policies are peace of mind and worry about financial consequences.

• The most common reason given for not having life and health insurance was that insurance is too expensive (74%), followed by being healthy and not seeing the need for it (14%), and not trusting insurance companies (13%).

• Cost of living meaning people can no longer afford insurance was the top reason given for no longer having insurance across life, trauma or critical illness, income protection, total and permanent disability and health/medical.

• For those without insurance, 64% would consider taking out an insurance policy if they had more money, 25% would take out an insurance policy if their health started declining and 18% would take out an insurance policy if they started a family. There is a gap in understanding of how insurance works, with only 3% of those who would consider taking out an insurance policy if their health started declining knew that they might not be able to get cover for certain health issues or they might face higher premiums because of them.

• The majority of health (61%) and life (77%) insurance policies are paid by individuals, with the remainder being partially or fully subsidised by employers.

• When it comes to health/medical insurance or life insurance being provided by employers, 54% really want this and a further 35% might possibly want this.

• 45% of respondents have a poor understanding of the relationship between risk and return.

2,002 online survey responses were collected during March 2024 and were representative of the NZ consumer population in terms of age, gender and income.

It is worth noting that as a low engagement product, life and health insurance is something that respondents find hard to recall accurately. That leads to interesting results - this survey contains a probable over-estimate of the number of people who own health insurance, and a probable under-estimate of the number of people who hold life insurance. But the recalled level of cover is, in itself, interesting. For example, if you think you do not have life, trauma, or income insurance, but in fact you do, you or your estate may fail to claim when you may be eligible to do so.

Readers interested in contrasting these survey results with data on the eligible population should contact us.

More news:

Partners Life has decided to stop using its Customer Outcome Matrix

Southern Cross Health Insurance appoints Grant McIvor as chief digital officer

MAS looking for a Head of Technology Strategy and Architecture

FSCL reminds advisers policies need to continue to meet client needs

The Financial Services Complaints Ltd (FSCL) has stated that advisers must ensure insurance policies continue to meet the needs of each client, each time it is renewed. This comes in the wake of a complaint where a customer paid out $37,000 in funeral insurance over the course of 17 years, for a policy that had a maximum payout of $10,000. The customer raised a complaint with the insurer and the FSCL and following a dispute process the customer was paid out compensation.

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Southern Cross Health Society Annual General Meeting is on 4 December

Financial Advice NZ End of Year Celebration Canterbury Community of Practice 5 Dec

FSC Life Insurance Special Interest Group Networking Event 10 December

FSC Outlook 2025 is on 4 February 2025

The 2025 Women in Insurance Summit NZ is on 25 February 2025

FSC’s Regulatory Forecast for November, available to FSC members here

Early KiwiSaver withdrawals during October ticked over $200 million for the first month ever

Fidelity Life announce product enhancements and digital, service, and retention initiatives

At Fidelity Life’s Engage 2024 conference, Fidelity Life announced a range of product enhancements, digital, service and retention initiatives and other news.

• Trauma and Life covers: The entry eligibility for the Inbuilt Child’s Trauma benefit has been reduced from two years to three months, allowing more families to receive early protection. A new, separate benefit specifically for newborns facing trauma has also been introduced. Fidelity Life will also trail a premium discount for defined exclusions on trauma covers in the coming months.

• Condition Definitions: Refinements have been made for clarity, and Terminal Illness has been introduced as a defined condition across the trauma range, including Child's Trauma.

• Bereavement and Child’s Funeral Benefits: The Bereavement Benefit has been increased from $15,000 to $25,000, and the Child’s Funeral Benefit has been increased from $3,500 to $15,000 for children aged 10 to 20.

• Grief Counselling Benefit: A new benefit offering an additional $2,500 to the sum insured.

• Financial Planning Benefit: Easier access by removing thresholds and extending the claim period.

• New Specific Injury Cover: A low-cost solution that pays a lump sum for any of 30 defined injuries.

• Live Chat: Quick and easy access to New Business and Underwriting teams via Adviser Centre.

• New-Look E-App: A modern and intuitive user experience launching in March 2025. The E-App’s latest upgrade goes live later this month, with the new ‘share’ feature enabling advisers to send a link to their customers, allowing customers to complete all or part of the application on their own.

• Dedicated Adviser Service Team: A team committed to servicing all adviser needs.

• Enhanced Retention Tools: Including renewal reminders and automated SMS reminders for customers. There will be additional roles created too.

• Expanding adviser support roles: Fidelity Life are creating new roles, including a National Partnership Manager for mid-sized and corporate firms, as well as an Auckland Business Manager and a Desk-Based Business Manager, to provide more tailored support and drive closer engagement.

• Adviser Edge Programme: New additions to the programme include an invitation-only overseas study tour and new practice manager masterclasses for admin staff.

• Grow Together programme: Coming in early 2025, the invitation-only Grow Together programme will provide dedicated, prioritised support across key areas including new business, underwriting, and retention. Advisers in the programme can expect to benefit from dedicated support resources, exclusive benefits, and access to a wide range of support tools and professional development opportunities.

• Adviser Council: Fidelity Life are inviting advisers to express their interest in joining their Adviser council, which meets quarterly with Fidelity Life’s leadership team to discuss industry updates, share market trends, and provides objective feedback on their initiatives.

• Adviser relationship survey: To better understand market perceptions and Fidelity Life are launching a bi-annual Adviser relationship survey to provide key insights into advisers' experiences and expectations and where Fidelity Life need to improve.

• Group Solutions enhancements: From early 2025, Fidelity Life will be launching a quarterly industry insight, Group IQ; holding an annual onsite Group HQ conference for the top 30 group advisers; and launching a new group solution designed for small businesses, providing enhanced tools and technology for a smoother experience and better outcomes.

Bronwyn Kirwan, Fidelity Life's Chief Commercial Officer, said

"We are thrilled to introduce these new product enhancements and initiatives. They are a testament to our ongoing commitment to providing our advisers and customers with the best possible support and value.

These enhancements deliver more value, greater accessibility, and increased choice."

More info:

Chubb Life change underwriting process for Mortgage Repayment Cover

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The FSC has recorded a small deficit of almost $46,000 before tax over the 12 months to June 30

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