Legal and regulatory update for the life and health insurance sector

25 Sept 2020 – Good Returns reports that the Australian government is set to axe responsible lending laws. https://www.goodreturns.co.nz/article/976517550/australia-to-scrap-responsible-lending-laws.html

23 Sept 2020 – IRD advised that the Public Guidance Work Programme 2020-21 has now been finalised. https://www.taxtechnical.ird.govt.nz/-/media/project/ir/tt/pdfs/consultations/work-programmes/public-rulings-work-programme-2020-2021.pdf

24 Sept 2020 – FMA released a report on its supervision activities over the past 18 months. https://www.fma.govt.nz/news-and-resources/media-releases/fma-issues-supervision-report-2020/

Commentary: 

The development in Australia where responsible lending rules are being axed is of considerable interest. In specific terms I do not know enough about the details of the Australian lending legal and regulatory framework to comment. In general terms there are some good questions to be asked about what rules are fit for purpose in an environment with very low interest rates for borrowing and with other consumer protections and processes available. I shall take a look at that development with some interest. Given the involvement of our current Minister of Commerce and his work on predatory lending practices I doubt this is going to appear on his agenda. 


New Asteron Life Head of Life appointed, and more daily news

Asteron Life has announced that Grant Willis has been appointed as the new Head of Life. In this new role Grant will oversee the core functions of product, pricing. sales, operations, claims as well as client servicing.

“I am pleased to announce the appointment of Grant Willis to the newly established Head of Life role, effective immediately.

He comes into the role from a career in financial services, including the past nine years at Suncorp New Zealand, most recently as Executive Manager – Life, in Insurance Solutions, and from 2011 to 2016 was Asteron Life CFO. Grant has also held senior roles at AIG NZ, Colonial Fiji (a subsidiary of CBA), ASB and Sovereign.

As Head of Life, Grant will oversee the core functions of product, pricing. sales, operations, claims and client servicing. His appointment will enable us to focus on continuously improving customer outcomes in partnership with you.”

In other news

FSCL: FSCL celebrates 10 year anniversary

FSC: Generations Digital Conference registration open

Partners Life: Expressions of interest for 3 day October Virtual New Adviser Training Course now open

Partners Life: licensing information webinar to be held 24 September at 11 am


Asteron Life premium increases, and more daily news

Asteron Life has made changes to premiums effective 21 September 2020. The introduction of premium increases has been in response to claim costs being higher than expected. The premium increases will only impact customers on a stepped premium. Depending on customer segments, increases will be between 0% - 6%. Please refer to the table below. 

“These increases are in response to higher than expected claim costs observed in our most recent claims experience review. Based on this, we have adjusted our long-term claims outlook and updated premiums to ensure that our business will remain sustainable to support our customers both now and in the future. We perform regular reviews to keep any increases small, and as manageable as possible for customers.”

The new rates will not apply to quotes created before 21 September, but the quotes will be valid for only 30 days. The premium changes will affect existing customers after their next policy anniversary or after 21 October 2020.

“The new rates will apply for new customers from 21 September 2020 and will be reflected in policy documents. Quotes created before 21 September will be valid for 30 days.

The changes will apply for existing customers from their next policy anniversary on or after 21 October. Customers will not see any specific reference to the change in rates, but renewal notices will continue to mention that premiums can increase due to changes in market conditions.”  

 

The increases are higher, generally, for female lives than for male lives in trauma. They are also higher for both younger lives and older lives, across all product types, while the changes for lives at the main ages of acquisition (between about age 35 and 50) are more limited, probably constrained by competitive pressures. More details will be given in the forthcoming quarterly life and health report. 

 

Product 

Benefits 

Increase 

Personal Insurance 

 

Life cover 

0-6% 

Trauma recovery cover
Life cover buyback benefit Trauma reinstatement benefit Continuous trauma benefit 

Standalone 0-6% Accelerated 0-4% 

Income protection cover Mortgage and rent cover Mortgageandliving cover Immediate assist package Specific injury support benefit 10-hour benefit 

0-6% 

Business Insurance 

Life cover 

 

0-6% 

 

Trauma recovery cover
Life cover buyback benefit Trauma reinstatement benefit Continuous trauma benefit 

Standalone 0-6% Accelerated 0-4% 

SmartLife 

 

Life cover 

 

0-6% 

Trauma recovery cover Trauma (standard)
Trauma deluxe
Life cover buyback benefit Trauma reinstatement benefit Continuous trauma benefit 

Standalone 0-6% Accelerated 0-4% 

Mortgage repayment option (disability) 

 

0-6% 

SmartLiving 

SmartLiving value SmartLiving deluxe 

0-6% 

SmartBusiness 

 

 

Life cover 

 

0-6% 

Trauma recovery cover Trauma (standard)
Trauma deluxe
Life cover buyback benefit Trauma reinstatement benefit 

Standalone 0-6% Accelerated 0-4% 

 

Income Protection 

Income protection (personal and business) Specific injury support benefit 

0-6% 

 

 

 

In other news

Southern Cross: AA Insurance and Southern Cross recognized for diversity efforts

Southern Cross: Coronavirus: Did lockdown actually make some of us happier?

nib: nib outlines strategy of 'data-driven personalisation'

FSC: register for Generations 2020 digital pass


Southern Cross experience a surplus, and more daily news

Southern Cross has reported a surplus of $32.4 million for the year ended 30 June 2020. This financial reporting comes after the $50 million return to members. $972 million was returned in claims in the last financial year, this equals to 85 cents in claims being returned for every dollar received in premiums.

“Southern Cross Health Society Group has today released its annual financial results, posting a surplus of $32.4 million for the year ended 30 June 2020.

The announcement follows Southern Cross Health Society’s pledge during the Level Four lockdown in April to return $50 million to its members.

In the last financial year, the Society returned $972 million in claims and received $1.138 billion in premiums.

For each dollar received in premiums, it returned 85 cents in claims to members, compared with an average of 62 cents in the dollar among other New Zealand health insurers.”

“The business paid out 72 per cent of all private health insurance claims, significantly more than its 62 per cent market share based on Health Funds Association of New Zealand data.

Nick Astwick said that Southern Cross was focused on members during the last financial year. This included pledging to return $50 million, setting up employees to effectively working from home and ensuring the business digitisation process is on track.

Chief Executive Nick Astwick said the Society’s focus during the last financial year was on taking care of its members: “We were with our members from the start of the pandemic, returning $50 million to them, and introducing a significant range of options for those in need of hardship relief.

“At the same time, our workforce was very quickly set up to work remotely, ensuring service levels were seamlessly maintained.”

Astwick said cost-saving digitisation of the business had continued at pace, with 82 per cent of customer channels now fully digitised, and more than 96 per cent of claims submitted digitally.” Click here to read more

In other news

Southern Cross: Woman who lives in fear of jaw dislocation determined to get replacement

Southern Cross: Southern Cross gives support to students' mental health programme

AIA: Depressed man wins $173,000 battle with insurer AIA - there will be more discussion of media claims coverage in the forthcoming quarterly life and health sector report. 


Legal and regulatory updates for the life and health insurance sector

21 Sept 2020 – FIU posted to its website the August 2020 AML/CFT Suspicious Activity Report.

21 Sept 2020 – The Takeovers Panel released the latest version of CodeWord, Issue 51, containing commentary on:

  • Being careful with the Code if holding shares through different entities
  • Recent guidance updates, including:
    • Schemes of Arrangement
    • Lock-up Agreements
    • Exemptions
    • Creeping Acquisitions
  • New Class Exemption – Voting Agreements for Schemes of Arrangement
  • Covid-19 Class Exemption
  • No more cheques

What kind of mistake was this?

Sometimes the world is a bit binary: if its not a 'genuine' mistake... then you must have done it on purpose! When journalists interview insurance companies you can almost hear the subtext out load: this wasn't a mistake, this is how you treat all your clients.

Sometimes it is bias, not even conscious, but an assumption about how the world works that means you might see some claimants as more likely to be fraudulent, in declining this one, that fits the pattern of the others, without examining all the evidence, means we make a mistake. It is simply not the same as the genuinely one-off mistake that can happen when a specialists report was overlooked.

Another is a complete mismatch in expectations. An insurer asks for a series of tests and reviews, which are "obviously" entirely standard in nature, to prove a TPD claim. The client sees an insurmountable list which is "obviously" intended to signal that their claim is unlikely to be paid and to deter them from pursuing it further. 

Lastly, the sin the corporate is most likely to commit, is failure to take responsibility for the error - eloquently put in this post by Seth Godin. 

That is why the category of mistake is really important to identify in order to build better systems and process - and to build more trust with clients and business partners. 

 

 


 Development of Clearhead Te Reo platform

nib has announced that a Te Reo Māori platform has been launched in partnership with Clearhead and nib foundation. The Clearhead website and chatbot have been translated into Te Reo Māori to offer Maori communities the opportunity to better use the service as it has been found that Māori are twice as likely to experience mental health issues than people who aren’t Māori. This launch makes the service the first mental health service to support an indigenous language.

“Clearhead, a Kiwi digital mental health company has today launched its translated te reo Māori website and chatbot offering in partnership with nib New Zealand (nib) and nib foundation, designed to help reduce the barriers Māori communities often face when accessing mental health services.

Māori populations are consistently over-represented in New Zealand’s suicide statistics, are twice as likely to experience mental health issues compared to non-Māori, and 1.5 times as likely to report experiencing anxiety or depression.

As a global first for any digital mental health service to support an indigenous language, the translation marks an important step towards providing culturally inclusive resources to support the health and wellbeing of one of our most vulnerable communities.” 

Dr Angela Lim, Clearhead CEO, has said that mental health resources available don’t accommodate how Maori wish to access resources and support. Lim continues by saying that digital solutions that offer anonymity, flexibility, and affordability must be offered to improve outcomes for Māori. The launch of the new platform during Māori Language Week is intended to highlight the importance role culture plays on mental wellbeing.

“Clearhead CEO, Dr Angela Lim says that while Māori are disproportionately represented in the public mental health system, the resources available do not necessarily take a user-centric approach of how Maori would prefer to access these resources and support.

“Māori make up 40 percent of patients in the public mental health system, yet only around three percent of clinical staff in the sector identify as Māori, and an even smaller number are fluent in te reo Māori. To some, te reo is a fundamental part of their identity – and yet we face significant challenges in delivering culturally appropriate services to this community,” Dr.Lim said.

“In order to improve mental health outcomes for Māori, utilising digital solutions where we can provide anonymity, flexibility, affordability and overcome geographical barriers can be a viable solution. We hope our platform can assist in improving reach and engagement for Māori seeking mental health support and provide that safe place where they feel heard,” Dr Lim added.

With the new platform launching during Te Wiki o Te Reo Māori (Māori Language Week) Clearhead’s aim is to highlight the importance culture has on one’s mental health and wellbeing. Research from the Mental Health Foundation has demonstrated that a strong cultural identity – including a connection with Māoritanga and te reo within Māori communities – is linked to positive wellbeing and a reduced risk of suicide.” Click here to find out more

In other news

nib: leaders and employees took part in a 10-week Māori language training program designed by Ngāti Whātua Ōrākei

FMA: FMA details Covid-19 response

FSC: "Alarmingly excellent" results for Kiwis who seek financial advice


Legal and regulatory updates for the life and health insurance sector

15 Sept 2020 – NZ Police FIU and ACAMS issued invitations to the 2020 AML/CFT conference to be held between 10-11 November 2020, providing for both on-site and virtual conference access. https://www.police.govt.nz/advice-services/businesses-and-organisations/financial-intelligence-unit-fiu/fiu-acams-conference

17 Sept 2020 – RBNZ released the outcomes from a COVID-19 stress test of New Zealand banks. https://www.rbnz.govt.nz/news/2020/09/stress-test-reinforces-importance-of-bank-capital

18 Sept 2020 – DIA advised on its website of the release of an AML/CFT Supervisors updated enhanced CDD guideline, dated August 2020, noting also the intent to shortly publish a webinar on its website which will deep dive into the enhanced CDD obligations. https://www.dia.govt.nz/AML-CFT-Updated-enhanced-CDD-guideline


Fidelity Life licensing questionnaire, and more daily news

Fidelity Life are asking all advisers who have agencies with them to complete a licensing questionnaire. The questionnaire will allow Fidelity Life to understand what an adviser’s agency structure will be in the new regime, this will allow the insurer to continue accepting new business and paying commission. The questionnaire will be emailed out to advisers shortly and must be completed by 14 November 2020.

“So we can keep accepting your new business and paying you commission under the new adviser licensing regime, we need to know what your agency structure is going to be from 15 March 2021.

To make it easy for you we’ve developed a questionnaire. We’ll be emailing these out shortly so keep an eye out for yours.

So we have time to reflect these changes in our systems please respond by 14 November 2020.”

In other news

Fidelity Life: Building Better Businesses Live training to be held 18 September 2020

Fidelity Life: Disclosure Live: understanding the new disclosure requirements training to be held 22 September 2020

Fidelity Life: Part 1 of the online product accreditation programme, Learning HQ, is available now 

Fidelity Life: Part 2 of the online product accreditation programme, will be available in October 2020 


A checklist for avoiding bad choices

There are a few checklists you might use for good decision making. The Harvard Business Review publishes a good book which summarises the main methods for good quality decision-making - it is quite readable and not too academic. It is ideal for major decisions. But then again, you can read this brief challenge list, put together recently by Seth Godin: https://seths.blog/2020/09/bad-choices/

 


Southern Cross offering domestic travel insurance, and more daily news

Southern Cross Travel Insurance has announced that it will be offering customers domestic travel insurance product.

Customers will be offered:

  • Cover for cancellation of your flight and accommodation if you can no longer travel
  • Cover for accommodation and other expenses if your flight is delayed or cancelled
  • Cover for your luggage and other personal belongings if they’re stolen or damaged
  • Cover for excess charges if you have an accident in your rental vehicle
  • Cover for the kids if you’re delayed getting home and need to pay for extra childcare costs
  • Cover for your furry friends at the kennels if you’re delayed getting home

Click here to read more

In other news

Kiwis with advisers end up significantly better off - research

AMP Australia: AMP advisers call for government inquiry over alleged fraud, deception


Legal and regulatory update for the life and health insurance sector

16 Sept 2020 – Treasury published the pre-election economic and fiscal update. https://www.treasury.govt.nz/news-and-events/news/2020-pre-election-economic-and-fiscal-update-published-today

16 Sept 2020 - MBIE released a statement that the Government planned responding to the retirement income policy review this year, but is taking further time to consider New Zealand’s retirement settings in light of the impacts of COVID-19. https://www.mbie.govt.nz/about/news/update-on-government-response-to-retirement-income-policy-review/

17 Sept 2020 – Minister of Commerce and Consumer Affairs, Hon Kris Faafoi, released a statement that the  Government is working on how New Zealand’s retirement income policies and settings can best support Kiwis in light of the COVID-19 economic recovery, with the help of the Retirement Commissioner’s latest review. https://www.beehive.govt.nz/release/economic-recovery-guides-govt-response-retirement-income-policy-review


AIA digital makeover driven by COVID-19 crisis, and more daily news

Sam Tremethick, AIA distribution executive, revealed that AIA is in a better position now that it was a year ago. This has been credited to people being more risk averse and understanding the need for protection.

“When New Zealand went into the first lockdown, AIA settled into a period of big business and even bigger change. Since then, innovation and technology have reshaped the way that the business functions.

AIA distribution executive Sam Tremethick told Good Returns that like a lot of industries AIA took a hit in the April/May period, but quickly bounced back to a point where “year on year as of today we are doing better than this time last year”.

Tremethick attributes the rise in the insurance business to “a direct result of people being more risk averse than normal and just being conscious of the need for protection”. But along with a rise in business came a chance to reshape their processes for the company that during lockdown shifted to being almost 100% of staff working from home."

Sharron-Moana Botica, chief customer officer, said that understanding how to offer advisers support during lockdown was key. Last August’s launch of AIA hub resulted from adviser feedback and has been continuously enhanced. The current platform, eApp Share, is described as revolutionary. Through the use of eApp, margins of error have been minimised, application times has been accelerated, and customer experience has been improved. The introduction of eApp has also allowed AIA to reflect on processes and current practices. Currently, 75% - 80%  of all applications are submitted through the app, AIA is considering whether to move the application process solely to eApp.

“AIA chief customer officer Sharron-Moana Botica said that during lockdown, figuring out how to support advisors was key. “In August last year we launched our new online platform AIA hub into the New Zealand market. But when you have a digital tool you always need to be enhancing it. So this latest development is what we call eApp Share.”

eApp Share is a tool that may prove revolutionary for advisers. Botica said that the digital program “was developed in response to feedback from advisers who wanted to continue the collaborative process of filling out an application.” Collaboration is key to the program which allows the adviser to push out documents to the client, the client to fill out the disclosures in their own time, and for the conversation to continue between client and advisor during the entire process.

Moving the processes online have also meant huge strides forward in narrowing down margins of error. While paper applications have a 30% error rate, the eApp Share program’s internal validation systems have managed to remove the bulk of these errors. This is because the system prompts users to submit accompanying information and the forms show where information is required before they can be submitted.

It has also increased speed, whereas paper applications took around five days, the digital system has no such reliance on printing, scanning and signing. Typically it takes customers between 10-30 mins to complete their part of the eApp form.

Botica says as well as improving the customer experience, eApp Share has aided AIA internal systems. “It helps us to look at what are the types of disclosure that are coming through. We can do a lot of analytics on our underwriting and the types of question sets that we use.”

With 75-80% of applications now processed through the eApp system it looks like it is here to stay. On whether we could see AIA moving to a 100% eApp system any time soon Botica said that “we are in conversation with their advisers on the ground. Becoming more digital is part of our future, not only in the business space but also in our servicing and claims side.” Click here to read more

In other news

Suncorp New Zealand a finalist for Sustainable Business Awards

AIA: AIA awarded Insurance Employer of the Year in NZ Women in Insurance Awards

FSC: Get In Shape Session 9  - Risk Management and Implementing a Risk Framework in your Business

Financial Advice webinar: Unlocking the Code in the New Financial Advice Regime Part 2


Legal and regulatory update for the life and health insurance sector

15 Sept 2020 – NZX provided an update on various Listing Rules class waivers granted in March 2020 in relation to Covid-19.

15 Sept 2020 - Minister for Climate Change, James Shaw, announced New Zealand will be the first country in the world to require the financial sector to report on climate risks. The new regime will be on a comply-or-explain basis, based on the Task Force on Climate-related Financial Disclosures (TCFD) framework. Businesses covered by the requirements will have to make annual disclosures, covering governance arrangements, risk management and strategies for mitigating any climate change impacts. If businesses are unable to disclose, they must explain why. If approved by Parliament, financial entities could be required to make disclosures in 2023 at the earliest. The new climate reporting requirements will apply to:

  • All registered banks, credit unions, and building societies with total assets of more than $1 billion
  • All managers of registered investment schemes with greater than $1 billion in total assets under management
  • All licensed insurers with greater than $1 billion in total assets under management or annual premium income greater than $250 million
  • All equity and debt issuers listed on the NZX
  • Crown financial institutions with greater than $1 billion in total assets under management, such as ACC and the NZ Super Fund

https://www.beehive.govt.nz/release/new-zealand-first-world-require-climate-risk-reporting

 


Reserve Bank of New Zealand on insurers paying dividends

Jenée Tibshraeny, writing at interest.co.nz says that The Reserve Bank of New Zealand (RBNZ) is advising insurers against paying dividends:

“Our stance in relation to prudential risks to insurers from Covid-19 is that there are many unknowns still to play out in terms of flow-on impacts from what we have already experienced, as well as the potential for new outbreaks,” Bascand said in a speech to the Insurance Council of New Zealand (ICNZ) on Monday.

“This caution is also reflected in our stance on capital retention and dividend payments, which we regard as being imprudent under these conditions.

"We will update insurers on our stance on this at or before publication of the next Financial Stability Report in November.”

Although this is guidance, and tougher instructions were issued to banks, it would be very difficult for an insurer to ignore such advice. It should be hoped that it is temporary. Well-capitalised insurers would be justified in wondering why they were being treated the same as a thinly capitalised business. In the medium term, the absence of a the ability to pay a dividend may make it materially harder for an insurer to raise capital, acting against the intention of the advice. I therefore expect that the suspension will have a limited duration allowing for assessment of the difficulty of transitioning to an environment of negative interest rates. 

 


Cigna: multi-benefit discount campaign details

Cigna has announced a multi-benefit discount campaign for customers over 30. The discounts applies to all new Assurance Extra policies issued on or after 9 September 2020. Depending on a customer’s age and the number of qualifying benefits they choose to take up alongside their Life or Life Income Cover, the discount amount will vary. As a result, policies with multiple people may have different levels of discounts applied. Alternatively, a single policy may only have discounts applied to certain covers.

The discounts available are:

  • 3% for customers aged 30-39 who take out LIFE + one or more other qualifying benefit
  • 5% for customers aged 40+ who take out LIFE + one other qualifying benefit
  • 7% for customers aged 40+ who take out LIFE + two or more other qualifying benefits

To be eligible customers must have a Life Cover in place and have a minimum sum insured amount of $200,000 and have a minimum of one qualifying cover.  Covers selected from the same group will be considered as one qualifying benefit in the discount calculations. Please refer to the table below for more details.

Selection

Benefit Group

Minimum Sum Insured

Covers that qualifies under the benefit group

Mandatory

LIFE

$200,000

Life Cover

Life Income Cover*

Optional

TRAUMA

$100,000

Trauma Cover - accelerated

Trauma Cover - standalone

COMPLETEDISABLE

$200,000

Complete Disablement Cover - accelerated

Complete Disablement Cover - standalone

MONTHLY DISABILITY

$2,000 per month

Income Cover - Agreed Value

Income Cover - Indemnity

Income Cover - Loss of Earnings

Income Cover - Loss of Earnings Ultra

Mortgage Repayment Cover

 


Reserve Bank announces review of the Insurance (Prudential Supervision) Act and more daily news

RBNZ has announced that it will be relaunching its review of the Insurance (Prudential Supervision) Act next month. The review comes after an industry consultation begun in 2017. The same consultation was set to continue earlier this year but was delayed as a result of COVID-19 related regulatory relief being implemented. Geoff Bascand, Deputy Governor and General Manager of Financial Stability, has said that maintaining an efficient insurance sector is important as customers expect to insure their assets and themselves.

“The Reserve Bank – Te Pūtea Matua will be relaunching the review of the Insurance (Prudential Supervision) Act (IPSA) in October.

The review began with an industry consultation in 2017 and was set to resume in March this year, but was delayed in-line with the regulatory relief implemented to free up the Reserve Bank and industry participants to support our economy and tackle the challenges created by COVID-19.

“Maintaining a sound and efficient insurance sector is important for New Zealand,” Deputy Governor and General Manager of Financial Stability Geoff Bascand says.

“Customers expect to be able to insure their homes and possessions and obtain life and disability insurance, and businesses utilise a range of insurance products to protect their assets and business interruption exposures,” Mr Bascand said in an address to the Insurance Council today.”

In 2010 the original Act was enacted to ensure that New Zealand was up-to-date with international standards for prudential regulation. The reason behind the enactment has not changed. The first Christchurch earthquake influenced that Act. International Monetary Fund assessment in 2017 and the independent review of Reserve Bank Supervision of CBL in 2019 have also influenced the Act. A policy paper is set to be published early next month and will detail the resumption, objectives topics, and timetable.

“The original IPSA was enacted in September 2010 to bring New Zealand up-to-date with international standards for prudential regulation. The reasons for enacting IPSA have not changed, and it is good regulatory practice to review legislation to ensure it is working effectively and update it for the lessons learned over the past 10 years, Mr Bascand says

The first Canterbury earthquake, for example, devastatingly occurred just a few days before the enactment of IPSA, resulting in intense supervisory activity and application of IPSA provisions over many years.

Other recent experiences that will help inform the IPSA review include an International Monetary Fund assessment in 2017 and the independent review of Reserve Bank Supervision of CBL in 2019. Further background and context has been provided by the joint Reserve Bank/Financial Markets Authority review into insurer conduct and culture, and the Thematic Review of the Appointed Actuary regime. The associated Solvency Standards need to be updated for impending changes to accounting standards and the review will consider adopting a mandatory buffer above the minimum solvency level.

A policy paper outlining the of the IPSA Review, and objectives and topics to be covered, will be published in early October. It will provide an updated overview explaining objectives, topics to be covered and an indicative timetable. At the same time, we will also release a consultation paper on principles to guide the review of Solvency Standards.” Click here to read more

 In other news

Accuro: Mel Stevens appointed as People and Culture manager

AIA: AIA has earned a place in the Hang Seng Corporate Sustainability Index, receiving an A+ rating and increasing its overall score

FMA: Pegasus Markets And Director Found Guilty Of Abusing FSPR


Legal and regulatory update for the life and health insurance sector

9 Sept 2020 – IRD issued guidance on the taxation of cryptoassets. https://www.ird.govt.nz/cryptoassets

10 Sept 2020 - Financial Advice New Zealand have created a Virtual Conference/ Regional Roadshow, with the conference hosted over four regions in a different region each day over 21-24 Sept, with the Auckland event being online. https://financialadvice.nz/conference-2020-home/

14 Sept 2020 - The Reserve Bank announced that it will be relaunching the review of the Insurance (Prudential Supervision) Act (IPSA) in October 2020. A policy paper outlining the resumption of the IPSA Review, and objectives and topics to be covered, will be published in early October. It will provide an updated overview explaining objectives, topics to be covered and an indicative timetable. At the same time, the RBNZ will release a consultation paper on principles to guide the review of Solvency Standards. https://www.rbnz.govt.nz/news/2020/09/work-on-insurance-act-review-resumes


How best to describe vaccine pre-orders? "Hoarding" or "Funding"

Various phrases have been dreamed up to describe the practice of many western countries - especially those with large pharmaceutical industries - of pre-ordering doses of COVID-19 vaccine. Vaccine nationalism is one. Others sometimes refer to the practice as "vaccine hoarding". This is deeply problematic. It is talking as if the vaccines are there, on the shelf. Graphs showing vaccine capacity and comparing that to the level of pre-orders (such as in this article) fail to adequately explain the cause and effect relationship between these two factors.

Consider the risks - there are many promising candidates and pathways to a vaccine, but the odds are, frankly, long. For the vaccine researcher huge sums of money must be spent in research, development, and testing. Yet without a pre-booked order for the vaccine, this may all be lost - not just by failure to make a viable and useful vaccine, but possibly by a more effective vaccine candidate coming on to the market, which is bought in preference. If you are conservatively managed business, perhaps, not unusually in a time of economic crisis, an eye on conserving capital, you may decide not to progress a vaccine option unless you were really confident about it. Yet the world needs the companies to take these risks. In fact, the more the better.

The scale of the cost (human and financial) of the pandemic is such that the value of effective vaccines is very, very large. By offering to pre-order doses governments are encouraging much more investment both in the science of researching vaccine and in the capacity to produce the vaccines. Turning back to the graph of capacity again and you can see the relationship between capacity and the size of the pre-orders. Far from reducing pre-orders, which would reduce the number of candidates advanced and the capacity to produce them, governments should increase pre-orders, to make it a better bet for teams to invest in the search - as argued by this article

International co-operation will be essential to any medium to long-term strategy with regard to COVID-19. It is truly a case of all being in this together - as, while there is a pool of infected people out there, reinfection could occur. However, it would be crazy for any government to lock themselves into a strategy right now. After all, so much is not known. The virus could mutate and fade away, or several good vaccines could be developed, or it takes a very long-time to develop a vaccine. Or a break through treatment is found - but no vaccine. Each might require substantially different implementation strategies. It seems best to wait and see how the situation develops before betting the farm on any particular approach.