Legal and regulatory update for the life and health insurance sector

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

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

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

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

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

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

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

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

Legal and regulatory update for the life and health insurance sector

18 Sep 2024 - The Reserve Bank of New Zealand has refreshed its chart pack of Financial Stability Indicators that help to inform its assessment of financial stability risks. The updated indicators feature data on: 
• Households;
• The housing market;
• Businesses and agriculture;
• The resilience of Banks and Non-Bank Deposit Takers; and
• Liquidity, funding and financial markets.

https://www.rbnz.govt.nz/hub/news/2024/09/rbnz-releases-updated-financial-stability-indicators

19 Sep 2024 - The Reserve Bank of New Zealand have given a development update on the Tara-ā-Umanga Business Expectations Survey. They plan to run two more pilots (in October 2024 and January 2025) before expecting to commence regular publication of the April 2025 survey in May 2025.

19 Sep 2024 - The Financial Dispute Resolution Service's Members' Forum and Annual General Meeting is on 22 October 2024, 3.30 pm. https://fdrs.org.nz/resources/news/fdrs-members-forum-and-annual-general-meeting-2024/

19 Sep 2024 - ASIC welcomes the new Australian financial market infrastructure (FMI) laws, which introduce new powers essential to ensuring a stable and efficient Australian financial system.  The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 strengthens the existing regulatory regime, ensuring ASIC and the Reserve Bank of Australia (RBA) (together, the Regulators) have strong and dependable powers to monitor, manage and respond to risks related to FMIs. https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-releases/24-208mr-asic-receives-new-powers-under-financial-market-infrastructure-reforms/?altTemplate=betanewsroom

23 Sep 2024 - The Australian Prudential Regulation Authority (APRA) has released its response to its July 2024 consultation on the remaking of Prudential Standard APS 117 Capital Adequacy: Interest Rate Risk in the Banking Book (Advanced ADIs), which is due to sunset on 1 April 2025. https://www.apra.gov.au/news-and-publications/apra-remakes-prudential-standard-aps-117-capital-adequacy-interest-rate-risk

Committee recommends Contracts of Insurance Bill moves forward

New Zealand’s Finance and Expenditure Committee has recommended that the Contracts of Insurance Bill move forward. After reviewing the bill, the committee proposed several key amendments:

•  Insurers are allowed reasonable time to gather information when processing claims.

• That dishonesty be treated as a lack of reasonable care rather than outright fraud.

• That a power to create some regulation of the use of genetic tests in underwriting is included in the draft law.

Government officials anticipate the bill to be passed by the end of this year. Changes insurers will need to prepare for once the bill comes into force include reviewing existing contracts to ensure compliance with new consumer protection measures; preparing for potential regulations on the use of genetic data; and ensuring claims processing procedures meet the new ‘reasonable time’ requirements.

With regard to the power to regulate the use of genetic tests, the report states:

“We agree that this issue is important. Our view is that a cautionary approach to genetic testing is needed to avoid undue genetic discrimination. However, we also grappled with the question of how to address genetic testing in this bill. We considered the implications of different options, including a full legislative ban on “genetic discrimination”.

“Ultimately, we recommend inserting new regulation-making powers, in Part 3, new subpart 4A (clauses 86A, 86B, and 86C), that would enable the Governor-General, on a recommendation of the Minister, to prohibit or regulate the conduct of insurers in relation to genetic testing. Before recommending any regulations, we expect the Minister to conduct a full policy development and consultation process.”

More news:

Financial Advice NZ webinar 'Creating an equitable advice experience for couples' 25 September

Sharesies KiwiSaver members can now combine multiple base funds instead of having to choose only one for their KiwiSaver scheme

Consultation for the Government’s draft Suicide Prevention Action Plan 2025-2029 opens

From 1 October 2024, Keytruda will be funded for eligible people with certain cancers

Cervical screening self-test leads to increased screening among previously un- and under-screened women

Legal and regulatory update for the life and health insurance sector

29 Aug 2024 - MBIE are seeking feedback on how the Customer and Product Data Bill will apply to the banking and electricity sectors. Consultation on their discussion paper 'open banking regulations and standards under the customer and product data bill' is due by 10 October 2024. https://www.mbie.govt.nz/have-your-say/exploring-a-consumer-data-right-for-the-banking-sector

30 Aug 2024 - The Council of Financial Regulators (CoFR) release their Quarterly Statement for August 2024. https://www.cofr.govt.nz/news-and-publications/quarterly-statement-by-cofr-august-2024.html

3 Sep 2024 - The Financial Markets Authority has filed criminal charges against a former financial adviser. The defendant, who has interim name suppression, has pleaded not guilty to two representative charges of theft by a person in a special relationship. The FMA alleges that the defendant procured approximately $1.7 million from two sets of clients on the basis that he would invest the funds procured on their behalf. It is alleged the defendant instead used the funds obtained for personal purposes. The alleged offending occurred between 2016 and 2022.  https://www.fma.govt.nz/news/all-releases/media-releases/fma-files-criminal-charges-against-former-financial-adviser/

4 Sep 2024 - The FMA publish Samantha Barrass' speech from the Financial Services Council 2024 Conference. https://www.fma.govt.nz/library/speeches-and-presentations/financial-services-council-conference-2024/

4 Sep 2024 - The Financial Markets Authority has cancelled Integrity Advisers Insurance Limited’s (Integrity) Financial Advice Provider (FAP) licence for engaging in serious misconduct.
Integrity is a Christchurch-based financial service provider that held a full FAP licence, providing financial advice to approximately 500 retail customer.
Following an investigation, the FMA found that Integrity breached its market services licensee obligations by failing to:
• give priority to client’s interests
• comply with the Code of Professional Conduct for Financial Advice Services
• treat customers fairly
• act with integrity. 
The breaches relate to Integrity’s treatment of clients who wanted to cancel their respective insurance policy between September 2022 and June 2023 (affected clients).  

https://www.fma.govt.nz/news/all-releases/media-releases/fma-cancels-integrity-licence/

5 Sep 2024 - Concerns about inconsistent application and insufficient disclosures of climate-related matters in financial statements has led the International Accounting Standards Board (IASB), in collaboration with the International Sustainability Standards Board (ISSB), to develop an Exposure Draft outlining eight illustrative examples.  https://www.xrb.govt.nz/consultations/accounting-standards-open-for-consultation/reporting-climate-related-and-other-uncertainties-in-financial-statements/

5 Sep 2024 - The Reserve Bank of New Zealand publish Christian Hawkesby's speech at the FSC24 Conference. https://www.rbnz.govt.nz/hub/publications/speech/2024/resilience-as-a-pathway-to-prosperity

AIA celebrate 5 years of AIA Vitality

AIA have released some statistics about AIA Vitality to celebrate five years of AIA Vitality being in the market.

• To date, over 60,000 people have joined AIA Vitality.

• On average, an AIA Vitality member in New Zealand completes a health and wellbeing assessment available in the app every 15 minutes.

• AIA Vitality members have completed over 18,500 free Vitality Health Checks.

• Since becoming AIA Vitality members:

  • 79% have moved to a healthy glucose range from an unhealthy glucose range.

  • 64% have moved to a healthy cholesterol level from an unhealthy level.

  • 49% have moved to a healthy blood pressure range from an unhealthy range.

• Less than 50% of New Zealanders meet the recommended guidelines of 2.5 hours of weekly physical activity but 95% of AIA Vitality Silver+ members meet this target.

• AIA Vitality members combined have walked the length of New Zealand 1,295 times.

• Members have achieved over 86,800 Status Reward vouchers and 976,500 Active Rewards vouchers – a combined worth of $9.1 million in rewards.

To celebrate the anniversary, AIA is giving customers who activate their AIA Vitality membership by 31 October the chance to win one of 20 Woolworths Gift Cards, each worth $500. Existing AIA Vitality members who hit their $5 weekly physical activity target anytime between 5 August and 1 September, go in the draw to win 1 of 5 Apple Store Gift Cards worth $729.

AIA have recently made some improvements to AIA Vitality, with a new AIA Vitality app with enhanced features and functionality being launched in April this year.

More news:

AIA offer clients a chance to win a year's insurance

The FSC runs a Money Month campaign on Money and You website

Partners Life and Banqer launch free financial literacy course

AIA appoint Bianca Bettini as new AIA Vitality Coach

Andrew Bayly says the CCCFA’s director and senior management liability provisions to stay

Westpac connect Volley to their Open Banking platform

Bell Gully put together an overview of the Customer Data Right bill and the CDR framework

Finance Minister says she wants external investors for outside capital for Kiwibank

GP’s having to raise fees after insufficient government funding increase

Legal and regulatory update for the life and health insurance sector

25 Jun 2024 - The committee stage of the Accident Compensation (Interest on Instalment Plans) Amendment Bill was completed and The Accident Compensation (Interest on Instalment Plans) Amendment Bill was read a third time. https://bills.parliament.nz/v/6/00103c69-0b28-4ad1-a702-08dc80370942

26 Jun 2024 - The FMA are holding two Q&A session on CoFI fair conduct programmes on 3 & 9 July. https://www.eventbrite.com/cc/qa-session-on-cofi-fair-conduct-programmes-3444339

26 Jun 2024 - The FMA are holding an online session on how to apply for a financial institution licence on 24 July. https://www.eventbrite.co.nz/e/how-to-apply-for-a-financial-institution-licence-tickets-929411062507?aff=oddtdtcreator

26 Jun 2024 - The FMA have published their Statement of Intent and Statement of Performance Expectations. The Statement of Intent sets out how they will do their work, what they will deliver, and how they will measure progress over the next four years. The Statement of Performance Expectations sets out their performance targets for the financial year ahead and includes several new measures focused on guidance, engagement, and the delivery of streamlined systems. https://www.fma.govt.nz/library/corporate-publications/statement-of-intent/

Legal and regulatory update for the life and health insurance sector

16 May 2024 - Office of the Privacy Commissioner clarifies guidelines around 72 hours notification period for privacy breaches. https://privacy.org.nz/publications/statements-media-releases/how-long-is-72-hours/

16 May 2024 - The Customer and Product Data Bill was introduced to Parliament. https://bills.parliament.nz/v/6/770a5f4e-2185-4f1f-1395-08dc75512299?Tab=history

20 May 2024 - A recent study by the office of the Privacy Commissioner of New Zealander’s attitudes to privacy shows higher levels of concern among Māori. https://privacy.org.nz/publications/statements-media-releases/maori-are-more-concerned-about-privacy-in-every-way/

21 May 2024 - Minister of Commerce and Consumer Affairs, Hon Andrew Bayly April 2024 diary released  with the following potential financial services sector related meeting noted:

• 4 April 2024 – MEET: Westpac (Pip Greenwood)

• 4 Apr 2024 – MEET: Suncorp (Jimmy Higgins and Clayton Cosgrove)

• 8 Apr 2024 – VISIT: Commerce Commission (Commerce Commission Staff)

• 10 Apr 2024 –MEET: Insurance and Financial Services Ombudsman (Karen Stevens)

• 10 Apr 2024 – MEET: AIA NZ (Nick Stanhope)

• 10 Apr 2024 -MEET: Commerce Commision (Commerce Commission Officials)

• 23 Apr 2024 – MEET: Westpac (Catherine McGrath)

• 23 Apr 2024 – MEET: Takeovers Panel (Takeovers Panel members)

• 30 Apr 2024 –MEET: Commerce Commission (Commerce Commission Officials)

https://www.beehive.govt.nz/sites/default/files/2024-05/Proactive%20Diary%20Release%20Apr%2024%27%20Hon%20Andrew%20Bayly.pdf

Contracts of Insurance Bill

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.

The Insurance & Financial Services Ombudsman, Karen Stevens, has said she looks forward to insurance contracts becoming fairer and easier to understand for consumers.

“… 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.

2024 Privacy Week Programme

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

1pm - Ask the experts: what you need to know about notifying individuals of a privacy breach – 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

11.45am - Shielding Your Digital Self: Understanding Online Privacy Rights under the Harmful Digital Communications Act 2015 – introductory

1.15pm - Managing Privacy in the Data & Generative AI Era – Intermediate

2.30pm - Young people don't care about Privacy - Debunking the myth – Introductory

3.45pm - Can we learn anything from over the ditch? The role of advocates in the privacy ecosystem - 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

Contracts of Insurance Bill which seeks to shift onus of disclosure duties to insurers has passed its first reading at Parliament

ICNZ has welcomed the first reading of the Contracts of Insurance Bill

The government calls for public submissions on the Contracts of Insurance Bill

TSB is looking for a Senior Data Scientist

Legal and regulatory update for the life and health insurance sector

30 Apr 2024 - The office of the Privacy Commissioner has announced the 2024 Privacy Week programme. https://privacy.org.nz/news/forums-and-seminars/privacy-week/privacy-week-2024/

1 May 2024 - The Reserve Bank of New Zealand says that New Zealand’s financial system remains strong as it continues to adjust to the higher interest rate environment. https://www.rbnz.govt.nz/hub/news/2024/05/financial-system-robust-to-high-interest-rate-environment

2 May 2024 - The Contracts of Insurance Bill was read a first time and referred to the Finance and Expenditure Committee, to be reported by 3 September 2024. https://bills.parliament.nz/v/6/019DAD64-3F9E-46B8-5CD9-08DC67F794E8?Tab=history

2 May 2024 - The Privacy Amendment Bill was read a first time and referred to the Justice Committee. https://bills.parliament.nz/v/6/56e3fbe7-1f3d-464e-b54d-08dbae8917ae?Tab=history