Legal and regulatory update for the life and health insurance sector

22 May 2024 -  The Office of the Privacy Commissioner asks for submissions on new guidance, Poupou Matatapu – doing privacy well. https://privacy.org.nz/news/consultations/poupou-matatapu/

28 May 2024 - The Reserve Bank of New Zealand - has confirmed the activation of Debt-to-Income (DTI) restrictions and loosening of Loan-to-Value Ratio (LVR) restrictions. https://www.rbnz.govt.nz/hub/news/2024/05/reserve-bank-activates-debt-to-income-restrictions

30 May 2024 - The Financial Markets Authority is holding a webinar on how to apply for a CoFI licence at 11am on 5 June. To attend, email cofi@fma.govt.nz

30 May 2024 - The Financial Markets Authority publish findings from the FMA’s supervision activities and monitoring of Class 1 and 2 licensed financial advice providers.  https://www.fma.govt.nz/news/all-releases/media-releases/fap-monitoring-insights-report/

30 May 2024 - The Financial Markets Authority is holding a series of online sessions to help Financial Advice Providers submit their FAP regulatory returns.

Session 1 - Friday 14 June 2024 at 9am
Session 2 - Monday 24 June at 2pm
Session 3 - Monday 08 July at 10am
Session 4 - Tuesday 16 July at 10am

30 May 2024 - The Accident Compensation (Interest on Instalment Plans) Amendment Bill was introduced to Parliament https://bills.parliament.nz/v/6/00103c69-0b28-4ad1-a702-08dc80370942?Tab=history

3 Jun 2024 - The Australian Prudential Regulation Authority (APRA) has written to all APRA-regulated entities emphasising the critical role of data backups in cyber resilience. The letter details the common issues observed in backup practices that could hinder system restoration during an incident. APRA expects regulated entities to review their backup arrangements and address any identified gaps promptly. https://www.apra.gov.au/news-and-publications/apra-clarifies-expectations-on-cyber-security-and-adequacy-of-backups

4 Jun 2024 - The Chief Executive of the External Reporting Board (XRB), April Mackenzie, has resigned. https://www.xrb.govt.nz/news/latest-news/

7 Jun 2024 - The Council of Financial Regulators release their Quarterly Statement for June 2024. Kris Faafoi joined the meeting to discuss the insurance sector’s priorities, risks, and challenges. The conversation covered three priority areas: 1) insurance affordability; 2) resilience; and 3) the regulatory environment. https://www.cofr.govt.nz/news-and-publications/quarterly-statement-by-cofr-june-2024.html

11 Jun 2024 - The Reserve Bank of New Zealand has released the dates for publication of its quarterly Monetary Policy Statement, Monetary Policy Review decisions and the 6-monthly Financial Stability Report. The new dates cover the period from August 2025 to July 2026. https://www.rbnz.govt.nz/hub/news/2024/06/monetary-policy-announcement-and-financial-stability-report-dates-for-late-2025-and-2026

11 Jun 2024 - The Commerce Commission has filed criminal charges against Kiwibank Limited (Kiwibank), alleging systemic breaches of the Fair Trading Act. The breaches relate to issues that resulted in more than $7 million being incorrectly charged to over 36,000 customers for fees and interest rates in relation to home loans, credit cards and overdrafts, over a period of several years. https://comcom.govt.nz/news-and-media/media-releases/2024/kiwibank-faces-criminal-charges-following-issues-that-caused-over-$7m-in-overcharges

Partners Life publishes gender pay gap data - we contrast that with ours

Partners Life has published their gender pay gap data as at March 2024. While the Financial and Insurance Services industry as a whole has a gender pay gap of 30.2%, Partners Life’s gender pay gap is at 24.5%, which they have reduced from 26.1% in March 2023.

While pay gaps for males vs females in like-for-like roles are very small at Partners Life, the 24.5% overall gender pay gap reflects a higher level of men in senior roles than women. Partners Life has identified this as an issue and have introduced a range of initiatives to help reduce their pay gap, including monthly monitoring, implementing training programmes, offering flexible working arrangements.

Here at Quality Product Research Limited at the end of January we had 11 eligible roles active and our gender pay gap was about 8.5% - it has been as high as 19% and as low as parity. Like Partners Life, in like-for-like roles the gap is tiny. From a diversity perspective we are a bit small for detailed reporting (it would pretty soon get down to very small sets so we tend not to ask too many personal questions) but we do know that roughly a third of our staff were born in New Zealand, a third hail from the broad Asia-pacific region, and the remaining third from the UK-Europe-Middle-East. We now have 15 eligible roles so the numbers will have shifted again, but we have not recalculated yet, which will happen near the end of the year. Diversity, equity and inclusion are important to us, so this is an area we discuss and review with an eye to ensuring we benefit from a range of experiences and backgrounds.

More daily news:

FSC24 session spotlight: Life and Health Insurance Masterclass 3 September

Dates and venues for the FMA's FAP monitoring insights sessions released

NZFSG reminds advisers to be vigilant against risk of cyber attacks

Rob Hennin talks about nib partnering with iwi to deliver health insurance

Steven Burgess says advisers need to ensure their clients understand the advice they are offered

mySolutions webinar 'Online FMA Monitoring Visit' 9am 29 May

FSC Webinar 'Māori engagement in the financial services industry' 18 June

Mary Holm’s financial column covers whether you really need life and health insurance

Kiwibank has announced the appointment of Anne Haira to its board

Craig Stobo appointed as chair of FMA

Craig Stobo has been appointed as the new chair of the Financial Markets Authority (FMA). Stobo has been appointed for a five-year term and takes over from Mark Todd, whose term expired at the end of April.

Commerce and Consumer Affairs Minister Andrew Bayly said

“Mr Stobo brings a significant depth of experience to the role, having worked as a director, diplomat, economist, and chief executive.

The FMA will benefit from Mr Stobo’s understanding of market issues and regulation, as well as the importance of informed participation from businesses and investors.”

More daily news:

The FSC brings the industry together to respond to the Contracts of Insurance Bill

Anna Schubert discusses ways AIA help advisers manage stress

AIA launch a Neurodiversity Toolkit

Southern Cross Healthcare have joined the New Zealand Disability Employers' Network

MAS is a finalist in the Ethical and Impact Investment Awards

Submissions open for the ANZIIF industry awards

Kiwibank welcome Anne Haira to the Kiwibank board

Westpac won the Corporate ESG award at the INFINZ awards

ASB has joined the Hidden Disabilities Sunflower programme

People seeking help from financial mentors jumps 40% in a year

NZFSG announce new non-executive director

The NZ Financial Services Group (NZFSG) has appointed Thérèse Singleton as a non-executive director, with the aim of enhancing NZFSG’s support for advisers by improving compliance, risk management and strategic operations. Singleton is currently the chief operating officer at insurance company Ando and is a member of the NZ Financial Advice Code committee.

Brendon Smith, board chair of NZFSG said

“Thérèse's extensive knowledge and exceptional track record in both the financial and insurance sectors make her an invaluable addition to our board.

Her insights will be pivotal as we continue to navigate through evolving regulatory environments and strive to set new standards in adviser services.”

More daily news:

MAS looking for a Head of Growth Markets

Jon-Paul Hale discusses complexities of policy replacement and servicing commissions

RiskInfoNZ Poll finds 85% of respondents' clients are reducing or cancelling their insurance cover

Financial Advice NZ webinars Professional Ethics Workshop 20 June

Kumeu Rugby Club won the nib Little Legends $10K Relay

Southern Cross Healthcare introduces new operating theatre training programme, Periop 101

AIA NZ women won the AIA Global football champs in London

Kiwibank win at the 2024 Genesys Customer Innovation Awards

The FMA publish May's 'Money with Mary'

61% of advice practices in Australian are one-person bands

Interest.co.nz estimate mortgage broker earnings

 Access to life-changing MS drug delayed due to staff shortages

nib release 1H24 financial results

nib have released their financial results for 1H24.

• Underlying operating profit of $13.2 million

• Premium revenue was $197 million, up from $179.7 million in 1H23

• Private health insurance experienced policy growth of 3.7%

nib New Zealand Chief Executive, Rob Hennin said,

“We have reported a solid first-half result and are positioned well for the full year. nib NZ has continued to see strong growth in resident private health insurance policyholders, and we have seen positive contributions from our international student, worker and traveller insurance business OrbitProtect and life and living insurance business nib nz insurance limited.”

Hennin pointed to nib’s focus on innovation as key to delivering value and improved services to customers, highlighting OrbitProject, the launch of the redesigned ‘my nib NZ’ app and website, and wellbeing initiatives like Toi Ora and Kickstarter as examples.

More daily news:

Andrew Bayly confirmed as keynote speaker at Financial Advice NZ’s Thrive conference

Kiwibank's unaudited net profit after tax for the six months to December 31 2023 was $105 million

Government could bring forward bill to close Māori Health Authority

Economists divided on whether the RBNZ will raise the OCR this week

Treasury warns Health services may need to be cut to slow rising costs

A year in review

2023 has been a difficult year for consumers and businesses alike. Conditions are similar to last year, with inflation remaining high, resulting in a continuing cost-of-living crisis, the OCR set at 5.5% and the RBNZ not ruling out a further hike next year, and housing prices only just starting to rise. How has that affected the insurance sector? Combined with an increase in regulatory red-tape tangling up banks, there has been a spike in lapse rates that very much looks like it is driven by the same forces.

NZ was badly affected by natural disasters this year, with insurers having to fork out $3.5 billion in general insurance claims for the Auckland Anniversary Weekend floods and Cyclone Gabrielle. Such heavy claims have impacted general insurers, perhaps part of the reason why Tower is looking to do a strategic review of its ownership structure.

It is this situation which greets the new National-Act-NZ First coalition government. They  have outlined a 100-day plan that includes: stopping work on the Income Insurance Scheme; introducing legislation to narrow the Reserve Bank’s mandate to price stability (removing the mandate to ensure maximum sustainable employment); signing a memorandum of understanding with Waikato University to progress a third medical school; disestablishing the Māori Health Authority; taking the first steps to extend free breast cancer screening to those aged up to 74; repealing amendments to the Smokefree Environments and Regulated Products Act 1990 and regulations; and setting five major targets for the health system. National promised to roll back the Credit Contracts and Consumer Finance Act (CCCFA) and to make changes to allow kiwis to split their KiwiSaver savings between different providers during the election campaign, so we will be watching how this plays out next year. In August, then National Party Leader, Chris Luxon, told the Financial Services Council conference that it was also their intention to repeal the Financial Markets (Conduct of Institutions) Amendment Act 2022. That hasn’t explicitly made it into the coalition agreement, but may possibly be covered by the planned regulation sector reviews to which the coalition commits under the Act Policy Programme. Although regulatory relief is often welcomed by the sector, so is long-term stability, so we have found views split on the proposed changes to the conduct law.

As of March 2023, all financial advice providers needed to have obtained their level 5 certificates to continue operating this year. We wrote about the impact of this on the market and just how many financial advice providers and financial advisers there are in the September 2023 Quarterly Life and Health Sector Report.

Accuro and Unimed members voted in favour of combining operations. Approval from the Reserve Bank of New Zealand is likely to come early next year. The Lifetime Group acquired Protection Solutions. Fidelity Insurance, formerly known as Westpac Life, was integrated into the Fidelity Life Assurance Company. In March 2023 Cigna NZ changed its name to Chubb Life Insurance New Zealand Limited (Chubb Life NZ) and is now trading under the Chubb brand. nib have told customers they are planning to amalgamate, with their health insurance company ‘nib nz limited’ and their life and living insurance company ‘nib nz insurance limited’ combining to form one single company known as nib nz limited. The acquisition of Partners Life by Dai-Ichi has been made more real by the appointment of new personnel and the announcement of Naomi Ballantyne’s change of role to come in 2024.  The Association of Financial Advisers (AFA) and the Financial Planning Association of Australia (FPA) have announced they will merge to form the Financial Advice Association of Australia. The Australian Competition & Consumer Commission (ACCC) denied the sale of Suncorp Bank to Australia and New Zealand Banking Group (ANZ).

There were some interesting court cases, with AMP settling with Australian advisers for A$100 million; MAS were penalised $2.1 million for making false and misleading representations to customers; Cigna was fined $3.575m for false and/or misleading representations.

There were lots of new faces joining the industry or changing roles this year.

• AIA New Zealand appointed Michele Embling as an independent non-executive Director; Ben Lovelock as Chief Risk Officer; Shaun Baird as Chief Financial Officer; Maddie Sherlock as Head of Customer Operations; Andrew Anisi as Senior Manager Contact Centre & Business Solutions; Aaron Gilmore and Katie Hunter as AIA Vitality Coaches; Calvin Romeo to the role of head of ASB Partnership.

• Asteron Life appointed Kirsten Young as the National Manager Adviser Distribution.

• Chubb Life board chairman Steven Fyfe retired and Paul Brock took over his role as Chairman while Linley Wood joined as an Independent Director to the board. Chubb appointed Monique Ravening as its new Head of Underwriting and Erica Hamer as Chubb's new Wellington-based Business Partnership Manager. Adit Witjaksono was appointed as property manager for Australia and New Zealand.

• Fidelity Life made some new appointments to key roles.  David Winspear was appointed as Head of Channel Strategy, Michelle Doyle appointed as the new Head of Solutions and Kylie Oldham appointed as Senior Group Insurance Business Manager.  Leigh Bennett was promoted internally to the role of Head of Underwriting and Mat Bark was appointed as Head of Channel Enablement. Giselle Baker was appointed as Head of Data and Analytics. In October, Ian Clancy acted as the Acting CEO until Campbell Mitchell was bought on board as the new CEO after Melissa Cantell resigned. Sam Kelly was appointed as Head of Regulatory Affairs.

• MAS appointed Matt Harvey as Chief Distribution and Marketing Officer, Craig Ward as Chief Innovation and Digital Officer, Dan Mead as an Investment Manager.

• nib appointed Stu Crowther as new National Manager – Adviser Distribution; Ian Sargeant as National Manager – Group, Partnerships & Strategy; Chris Carnall as Head of Distribution; Stan Bennetto as Group Health Business Development Manager.

• Partners Life appointed Gemma Vivian as GM Adviser Engagement; Gareth Allen as Senior Manager Adviser Partnerships. Naomi Ballantyne announced her retirement from Partners Life in March 2024.

• Southern Cross Healthcare appointed Mark Phillips as Chief Digital Officer; Dr Erica Whineray Kelly as Transformation Lead for Women’s Health; Jo Fair as Chief of People & Culture; Monica Goldwater as Chief Nursing Officer.

• Suncorp New Zealand appointed Suraiya Phillimore-Smith as its new Chief Customer Officer. Lindsay Tanner was appointed as an independent director of the firm’s three boards.

• Justine Gilliland was appointed to Unimed's board.

• ASB appointed Carl Ferguson Chief Financial Officer and Rebecca James as its new Executive General Manager of Business Banking.

• Westpac welcomed a new GM of Consumer Banking and Wealth, Michael Norfolk.

• Kiwibank appointed Julia Jack as chief purpose and brand officer.

• TSB appointed Kerry Boielle as new CEO after Donna Cooper resigned. Penny Burgess was appointed General Manager Customer Delivery; Molly Auva'a-O'Brien as General Manager Operational Excellence.

• AMP appointed Blair Vernon as CFO.

• Tim Grafton announced he’s stepping down as chief of the Insurance Council of New Zealand next year.

• Tony Dench started as Financial Advice NZ’s interim CEO following Katrina Shanks’ departure to head up The Australian and New Zealand Institute of Insurance and Finance (ANZIIF). Sonja Barrett was appointed as Financial Advice New Zealand’s Board Member Director (Risk) and Peter Fa’afiu was appointed as an Independent Member Director on the Financial Advice NZ Board. Stefanos Boulieris joined Financial Advice NZ, communicating online webinars and the upcoming conference in 2024 and Sarah Maxwell joined as Communications and Social Media Manager.

• Tim Tez and Sarah Phillips joined ANZIIF’s Board of Directors.

• Anna Scott, Ana-Marie Lockyer and Campbell Mitchell all joined the board of the Financial Services Council (FSC). David Bishop was appointed to the Chief Marketing Officer role.

• The FMA appointed Daniel Trinder as Executive Director – Strategy and Design; Michael Hewes as Director for Deposit Taking, Insurance and Advice; John Horner as Director of Markets, Investors and Reporting; Peter Taylor as Director Specialist Supervision and Response; Stuart Johnson as Chief Economist; Sharon Thompson as Executive Director – Transformation and Operational Delivery.

• Graeme Edwards took on the role of Lifetime Group director and chairman and David Haintz was appointed as an independent chairman of Lifetime Group Holdings and its subsidiaries.

• Craig Wagstaff joined New Zealand Home Loans (NZHL) as its new general manager for franchise, distribution, and marketing.

• The Adviser Platform (TAP) appointed Pooja Shetty as Senior Operations Specialist and Naz Mistry as a Compliance Specialist and Adviser Support.

• Some big names in the industry have retired, with David Haak, Tony Arthur, and our very own Rob Dowler retiring

Here’s to another exciting year in 2024!

FSC’s latest Money & You research finds a perception gap between financial confidence and financial literacy

The Financial Services Council (FSC) have released their latest Money & You research findings.

The research found a ‘perception gap’, with 82% of people feeling financially confident yet only 62% of people showing a real understanding of the four financial concepts tested.

Worryingly, the research found that 56% of New Zealanders aged 18 or older aren’t financially prepared for retirement, with that figure shooting up to 69% of women not feeling prepared for retirement. We are really keen to see this broken down by age group in future as we would expect most young people to feel the least prepared, and some of the group just pre-retirement to feature more of the better prepared. The fact that the figure rises sharply for women is probably a good reflection of the larger retirement gap that women face due to longer lives combined with, often, a gender pay gap, and also often, career disruption due to having children, which tends to make preparing for that retirement more difficult.

Of those in KiwiSaver, 42% are only contributing the minimum 3%, and 64% of employers are contributing the minimum 3% – leaving a vast gap between projected KiwiSaver funds at retirement and what’s needed for a ‘no frills’ retirement. It is hoped that other preparations are being made - such as paying off a home and investing in other ways. In practice we know that with a very high cost housing fewer will have paid off homes and that will also reduce the scope for non-KiwiSaver savings and investments for many.

The current cost of living is impacting people’s insurance buying behaviour. When it came to life insurance, the report found that expense was the highest reason for not purchasing insurance (63%) and 57% of respondents said they would take out an insurance policy if they had more money. 55% of people who had previously had health insurance have said that the cost of living is so high they can no longer afford it.

More daily news:

Kiwibank launch Apple Pay

MAS are recruiting for a Healthy Practice Adviser in Wellington

Tony Dench calls on the government to give considered and deliberate engagement with the sector

Bruce Patten says he's seeing more people cancelling insurances

Fidelity Life release financial results

Fidelity Life has released its annual report and financial results for the year ended 30 June 2023. Highlights include:

·         Insurance premium revenue of $450.4 million, up 33% from FY22

·         Total comprehensive income (net of tax) of $3.2 million, an improvement from their FY22 loss of $24 million

·         Underlying profit, excluding the impact of government bond rate changes (net of tax), of $19 million

·         Claims paid out in FY23 $209.7 million, up 27% from FY22

·         304,867 customers

·         Market share of 15.7%

Fidelity Life resumed payment of dividends, with Fidelity Life’s shareholders receiving a full-year dividend of $8.013 per share. The dividend is unimputed as the Group continues to utilise brought forward tax losses.

Fidelity Life Chair Brian Blake says

“We expected the benefits of our Westpac Life acquisition to start materialising in FY23, and that’s proven to be the case. Our performance shows the business is in good shape and proving resilient against a weak economy and the high cost of living.

…In response to adviser feedback, we’re introducing a raft of new initiatives spanning the digital, product and service spaces to make it easier for advisers to do business with us, focus on growth, and together take our respective businesses to the next level.”

More daily news:

Quality Product Research are holding an in-depth discussion on medical insurance non-surgical claims on 7 November

Accuro members support proposal to transfer Accuro insurance portfolio and operations to UniMed at first special general meeting

Deloitte Top 200 Business Awards finalists include staff from ANZ, ASB, The Co-operative Bank

ANZ Chief Marketing Officer Astrud Burgess named Effective Marketer of the Year at Effie Awards

Kiwibank received 6 awards, including the Grand Effie, at the 2023 Aotearoa Effie Awards

Ainsley McLaren talks about the investment needs and behaviours of women

CERT NZ create Own Your Online website, to raise understanding of cyber security issues

The unemployment rate rose to 3.9% from 3.6% in the September quarter

Fraud Awareness Week is taking place November 13-18

Cancer patient advocates say health system reforms are taking too long

Fidelity Life makes three key appointments in its Sales and Service team

Fidelity Life has made three key appointments in its Sales and Service Team. David Winspear (left) has been appointed to take on the newly created role of Head of Channel Strategy and Michelle Doyle (middle) has been appointed as the new Head of Solutions, both of whom will report to Fidelity Life’s Chief Sales and Service Officer Bronwyn Kirwan.  Kylie Oldham (right) has been appointed as Senior Group Insurance Business Manager, and will report to Fidelity Life’s Head of Group Insurance, Anita Los’e. 

David’s role will be leading the design and delivery of Fidelity Life’s channel strategy, delivering sustainable growth across its advisers and strategic alliance partners.

Michelle will be accountable for Fidelity Life’s adviser channel solutions, professional development programmes and their in-house adviser team.

Kylie will be responsible for developing Fidelity Life’s group insurance portfolio and expanding its market presence with new propositions, technology, sustainable pricing and commercial terms.

More daily news:

Partners Life is introducing a TPD option with its trauma cover products

FSC looking for an Event Project Lead and Marketing and Events Coordinator

nib partner with Revolutionaries of Wellbeing

Expressions of interest for the Gallagher Talent Programme 2024 are now open

Kiwibank agrees to pay an $812,500 penalty after it overcharged customers bank fees

Kiwibank recognised as a Gold, Silver and Bronze winner in the 2023 Best Awards

Fidelity Life share insights from key speakers at Engage Conference

AIA has released 2022 Claims Data

AIA has released their annual claims data for 2022.

• 93% of all claims received were accepted.

• Paid $646.4 million in claims.

• Broken down this comes to $121.5 million in Health claims, $233.8 million in Life claims, $111 million in Trauma claims, $74.4 million in Income Protection claims and $15.3 million in Total Permanent Disablement claims paid.

• Over 30,000 health claims were submitted online via the myAIA customer self-service portal.

• Life insurance accounted for 42% of all claims.

• For those aged 20 - 29 accidents are the main claim for life cover while the main claim for life cover in those aged 30 - 59 is cancer.

• Over 815,000 New Zealanders are covered by AIA.

More daily news:

AIA announces major expansion of its gym network

Jon-Paul Hale questions fairness of AIA moving policies after a couple separates

Study finds good financial advice could add almost 6 per cent to New Zealanders’ wealth in 2023

Simon Hofmann, General Manager of Marketing and Brand at Kiwibank recognised as NZ Marketer of the Year

Calls for Pharmac to fund wider range of cancer treatments