AIA community grant launched, and more daily news

AIA has launched their community grant programme. The grant is set on helping financial advisers motivate those in their communities to maintain a healthy lifestyle. Ten advisers whose ideas are voted as the best will be awarded $50,000 each.

“The programme has been designed to help financial advisers make a difference in local neighbourhoods and highlight the importance of health, wellbeing and overall financial resilience to New Zealand. Through a competitive application process, ten grants of up to $50,000 each will be awarded to initiatives designed to make a positive difference to the health and wellbeing of New Zealand communities.”

Advisers can submit their ideas on AIA NZ’s website and Instagram using the hashtag #aiahealthynz and tagging @aiavitalitynz.  The Winners will be announced in August.

“AIA will select ten applicants for the grant to be announced in August 2020.

To submit your ideas, post an image or video to Instagram with the tag #aiahealthynz, pin your local community and tag @aiavitalitynz.  Applications can also be submitted on AIA New Zealand’s website.” Click here to read more

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In other news:

The Protected Disclosures (Protection of Whistleblowers) Bill underwent its first reading in Parliament, being referred to the Education and Workforce Select Committee.

AMP: Sale of AMP Life criticised

To FAP or not to FAP, the update

Share: Former Fidelity executive joins dealer group

 


Changes in Suncorp management, and more daily news

Paul Smeaton the CEO of Suncorp New Zealand is set to leave his current role and move into the role of Chief Operating Officer at Suncorp’s headquarters. The role of Suncorp NZ CEO will be filled by Jimmy Higgins the current Chief Financial Officer.

“I want to let you know that I am moving to a new role within the Suncorp Group and that our Chief Financial Officer Jimmy Higgins will be stepping in as Acting Chief Executive Officer.

I will be heading back across the Tasman to take up a new role as Chief Operating Officer – Insurance based at Suncorp’s headquarters in Brisbane, as part of some wider executive changes within the Suncorp Group.”

Recruitment for a permanent CEO will begin shortly.

“While there is an internal and external recruitment process underway for my replacement, I am very confident that I will leave you in excellent hands with Jimmy in the interim.”

In other news:

nib: New clients that sign up using nibAPPLY 1 July – 30 September will go in the draw to win one of ten NZ Mystery Weekends for two

Fidelity Life: Fidelity Life launched Stress less their July Sharecare challenge

FMA: Statement of Performance Expectations

nib: nib Adviser Webinar - DHBs and nib’s First Choice Network

AMP: AMP Life rating affirmed after sale


AMP sale finalised, and more daily news

The sale of AMP Life to Resolution Life has been finalised. The sale amounted to A$3 billion (NZ$3.19 billion), with A$2.5 billion being paid in cash and the remaining A$500 million being paid in equity interest in Resolution Life Australia. 

“The total sale proceeds are A$3 billion, comprising A$2.5 billion cash and A$500 million equity interest in Resolution Life Australia, a new Australian-domiciled, Resolution Life-controlled holding company that is now the owner of AMP Life.”

As a result of the sale, AMP will transfer an estimated A$55 billion in client funds as part of the company’s internal separation process. And although AMP will sell AMP Life, the company will be providing technology and administrative services to AMP Life for the next two years as part of a transitional services agreement.

“The separation of AMP Life will significantly simplify AMP’s group structure. The internal separation process included the transfer of approximately A$55 billion of client funds via several successor fund transfers.

 

Collectively these transfers represented one of the largest fund transfers of this kind and enables AMP to focus on its strategic simplification of its wealth management platforms and products.

 

In addition to its residual 20% holding in Resolution Life Australia, AMP will continue to provide technology and administrative services to AMP Life for a two-year period under a transitional services agreement. All customers’ terms and conditions will remain unchanged through the separation.” Click here to read more

Therese Singleton has been appointed CEO of the Resolution Life New Zealand Limited which has an A- financial stability rating from Standard and Poor's. 

 

In other news:

Kepa: Kepa are planning to hold two-day workshops for compliance support people in mid-sized to large adviser businesses in August, September and October

Fidelity Life: Fidelity Life launched Live in the Green, their July Sharecare challenge

nib: nibAPPLY offer extended until end of September

RBNZ: Monetary Policy dates for 2021

 


Cigna non-medical limits enhancements, and more daily news

Cigna’s new non-medical limits for the Assurance Extra and Business Assurance product suites have been introduced. This change is looking to make the underwriting process and getting cover easier for customers.

“As part of these ongoing improvements, I’m pleased to announce that tomorrow – 1 July, we will release new non-medical limits for our Assurance Extra and Business Assurance product suites.

We understand that the process of getting medical tests as part of the application process can be time consuming. These new limits reflect our commitment to looking out for our customers by making it easier to be processed through underwriting and get cover. The new limits will be applied to any new business currently in underwriting with us."

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In other news:

FANZ: Financial Advice is looking to open registrations for the 2020 Financial Advice New Zealand Conference soon

AMP: Business Hub: AMP's Blair Vernon on the death of the office cubicle

FMA: FMA publishes Statement of Intent and Statement of Performance Expectations

FMA: FMA publishes NZX Obligations annual review


Upcoming changes to independent audit requirements and other daily news

Internal affairs have reported that Cabinet have agreed to introduce an amendment to the current AML/CFT Act on 31 December 2020. All reporting entities will be required to have an independent audit completed every three years instead of every two years.

Cabinet has agreed to introduce a new regulation to extend the default time frame for AML/CFT independent audits from two years to three years. The implementation of these regulations is the responsibility of the Ministry of Justice and until the new regulation comes into force reporting entities must comply with the current obligation to complete an independent audit every two years.”

As a result of the change in regulation, the following expectations have been set in place:

“The Ministry of Justice advises us that they propose to have the new regulation in force by 31 December 2020. This would mean: 

  • Law firms, conveyancers, and new Trust and Company Service Providers are required to have their first independent audit completed by 30 June 2020. i.e. no change to the current timing.
  • Accountants and bookkeepers are required to have their first independent audit completed by 30 September 2020. i.e. no change to the current timing.
  • Real estate agents’ first independent audit would not be due to be completed until 31 December 2021 i.e. the independent audit due date for real estate agents would be extended from 31 December 2020 to 31 December 2021.
  • For any reporting entity that has already completed its first or a subsequent independent audit when the new regulations are implemented, it will have three years from the date of the last independent audit to complete the next one.” Click here to read more Audit Guideline

In other news:

AIA: HealthScreen service has resumed

Privacy Bill: The Privacy Bill third reading was completed in Parliament under urgency in a continuation of the 24 June Parliamentary session, with the Act coming into effect on 1 Dec 2020. The NZ Herald reports the key provisions as:

  • Mandatory notification of harmful privacy breaches
  • Introduction of compliance orders
  • Binding access determinations - If an organisation or business refuses to make personal information available upon request, the Commissioner will have the power to demand release
  • Controls on the disclosure of information overseas
  • New criminal offences
  • Explicit application to businesses whether or not they have a legal or physical presence in New Zealand

Financial Advice NZ: Bring in the Experts: Disclosure Requirements with MBIE webinar

Southern Cross: Southern Cross supports new safe haven for at-risk pets

RBNZ: Reserve Bank welcomes new funding agreement


Product database updated

The QPR database has been updated and version 136 has been issued to subscribers and all changes are now live on Quotemonster. This version of the database includes the following changes:

Pinnacle Life policy wordings updated:

IP version 16/10/2018

Life version 01/12/2019

Funeral version 23/01/2019

Trauma version 01/12/2019

- no rating changes

 

Cigna business wording 11/05/2020 updated and rating changes applied. Revisions to ratings:

- IP/MP:

Future Insurability + Redundancy max entry/exit ages for Cigna

Pregnancy Premium Waiver Gender for Cigna

Insurable Income - SE rating for Partners Life

Insurable Income Salaried + SE amount score review

- Trauma:

> Diabetes Mellitus Adult definition, min age and amount score for Cigna

> Multiple Sclerosis definition review


Partners Life appoints Nadine Tereora, and more daily news

It has been announced that Nadine Tereora will join Partners Life as the new Chief Operating Officer. Nadine is set to join in 2021.

“It is my absolute pleasure to announce that Nadine Tereora is joining Partners Life in the role of Chief Operating Officer. While the details around her start date are still being worked out, we expect Nadine will be starting with us towards the beginning of 2021.

Having worked with Nadine in the past, and more recently having been in direct competition with her in her previous role as Chief Executive Officer at Fidelity, we are beyond delighted to be welcoming Nadine to the Partners Life team, and know that her unique mix of skills, experience and mana will be a huge asset to us as an executive team and to Partners Life as a whole.”

Naomi Ballantyne and Nadine Tereora

In other news:

Financial Advice NZ: Building on the stability of our banking system

Regulatory change needed, or halt to AMP Life sale, policyholder says

FSC webinar: Customers, complaints, code and claims - what have we learnt from COVID-19?

AIA: Progressive Care Claim Tool


Partners Life commission structure change, and more daily news

Partners revealed their updated commission structure. Advisers will receive their Medical commission in two parts, an initial commission and a bonus commission. As a result, this will reduce the initial Medical commission from 125% to 100%.

We communicated the introduction of the Customer Outcomes Matrix (COM) which has been very well received by both advisers and customers. We have finalised the development of the data capture component of COM and are now working on the development of the COM score thresholds for each of the measurement criteria. As a reminder your Bonus Commission rate is underpinned at your existing rate until 31 March 2021. 

As we initially communicated, we are also splitting Medical commissions between Initial and Bonus commission which means Medical Initial commission will reduce to 100% (from 125%) and introduce a Medical Bonus commission of 25%. This will enable us to reflect results of the COM for the medical component of a customer’s policy as it will do for Risk products.

Partners also recently announced that they will go forward with FAPO payments for businesses that have approved transitional licences and who have FAPO Commission Agreements in place.

“As well as the introduction of the COM and changes to Bonus Commission, we are also going live with FAP Override (FAPO) payments for those businesses who have an approved transitional licence and have signed their FAPO Commission Agreement with us. If you wish to progress in signing a FAPO Agreement with us, please ensure that you provide us with a copy of your transitional licence. You can email a copy to distributionsupport@partnerslife.co.nz.”

As a result of COVID-19 implications, Dealer Groups will receive FAPO payments for members without transitional licences as long as they have been members prior to 1 July 2020.

“Given the impacts of COVID-19 in delaying the FSLAA transitional licensing date, Partners Life has agreed to continue to pay override to Dealer Groups for those advisers who do not have a transitional licence and were members of the Dealer Group prior to 1 July 2020. We will continue to pay the Dealer Group override until such time as you provide Partners Life with a copy of your transitional licence and proceed with a FAPO agreement with us, or until FSLAA comes into effect in early 2021.”

 

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In other news:

Strategi Whitepaper: Embracing AML/CFT digitization

FMA: FMA urges financial advisers to apply for transitional licences

Financial Advice NZ: Bring in the experts webinar with Economist Cameron Bagrie 

Fidelity Life: results of financial impact of COVID-19 were shared. The main points were:

  • 15% of advisers felt that their business been financially impacted. 40% felt there was some business decline and 45% said they qualifies for assistance package.
  • 16% of advisers felt that their financial situation would become much worse within 3 months. 10% felt would become much worse in 6 months. 7% felt would become much worse in 12 months.
  • 3% felt that their financial situation would become much better within 3 months. 10% felt would become much better in 6 months. 22% felt would become much better in 12 months.
  • 53% of advisers were confident they’d get through current and future financial impacts while 1% of advisers didn’t think they’d get through current and future financial impacts

 


Trust discussion: the difference between insurers and advisers

Trust is so important to financial services because of two core reasons: one is that what we offer tends to be intangible, the other is that security is usually fundamental to the service. This explains the conservatism of most financial service brands. It also explains the marble entrance-ways and the appeals to consistency and continuous service that are constantly made in many more subtle ways: we will continue to be here. That is also why it is such a shame when a brand loses the attributes that have been gradually developed over years. Some brands have lost these - and it seems they were quick to lose, and will be hard to get back. 

But advisers are a bit different. In spite of news stories about poor sales practices, trust in advisers has generally been retained, only finally being broken when an adviser has been, say, taken to court. Otherwise, mistakes are often forgiven by clients. It really takes a lot to break that. 

This is a blessing and a risk. The higher the assumption of trust, the easier it can be to misuse it, so the good adviser must be more careful to ensure that they take care of the trust relationship. I think almost all do. Where they don't it often wasn't a deliberate decision to profit from a breach of trust (although that clearly does happen). It is more likely to be a mismatch between what was considered acceptable, or a blind-spot as to what the right standard is in some situations. That is where an external review can play a part - getting people from outside our culture to come in and see how the team culture works from a customer perspective can be immensely valuable from time to time. 

 


Gastric cancer claim denial, and more daily news

After taking out life and trauma insurance from Westpac in 2013, a family was denied a $100,000 insurance payout after Ailepata Ailepata was diagnosed with gastric cancer. His wife Shirley Farani has said this money would have helped raise her children.

“A South Auckland crane driver has been denied a $100,000 payout for his gastric cancer after a government-owned finance company switched his policy.

His wife is furious that on the basis of what she says is a salesperson's garbled pitch - and despite recent official warnings to the insurance industry about its practice of "churning", or replacing old policies with new ones - her family of three children has now been pushed to financial breaking point.”

The switch in policy resulted after they inquired about taking out a mortgage and a New Zealand Home Loans broker suggested they change insurers.

“The family, who live in Māngere Bridge in Auckland, had paid for life and trauma insurance cover from Westpac since 2013. When, in 2018, they enquired about a mortgage with government-owned New Zealand Home Loans, an agent visited their home. He suggested changing insurers. They did, but ended up with less cover.”

The change in insurer meant that their new cover was $100,000, half the amount they had with Westpac.

“They thought having their insurance with their mortgage provider might make sense, she admitted. The new policy provided just $100,000 trauma cover, half of the $200,000 they had under Westpac.She found that out when she made a claim for the gastric cancer, she told RNZ.” Click here to read more

I am always conscious that there will be another side to this story, and knowing New Zealand Home Loans, a statement of advice on file. It will be important to know about those. Of course, either way, this won't look good. It is a reminder that doing the right thing isn't just a question of what is correct from a procedural point of view, but how it will look from the public perspective. Nobody wants coverage like this.

In other news:

Asteron Life: Market insights and impact from Covid-19 webinar

Fidelity life: Updated agency agreement will come into effect 6 July

FMA: Financial advice's 'golden opportunity'

FMA: John Botica welcomes disclosure requirements and new regime start dates


Making a living will

Insurance is, of course, about planning for a future event before it happens. For life insurance, it is often described as a fundamentally altruistic purchase: you buy it to benefit someone else. Of course, the holder does enjoy a benefit, which is peace of mind. The planning helps us to relax a bit about the future, a future we know is coming for us: one day our life will end. Making a living will is also a kind of plan. A way to say some of the more difficult things, or put in focus some of the things you would most like to be remembered for. At this link you will find a beautiful article about a living will and what it meant to the family. https://www.huffpost.com/entry/ethical-will-legacy-letter-why-you-want-one_n_5eeb7a09c5b6c8594c7f2d03 About a ten minute read and well worth it. 


Financial Advice weigh in on disclosure regulations, and more daily news

Financial Advice New Zealand have voiced their approval of the new disclosure regulations that were announced by MBIE on 25 June 2020. Katrina Shanks has said that new regulations mirror what Financial Advice outlined in their CoFI submission.

“Financial Advice NZ chief executive Katrina Shanks said the new rules had picked up many of the points made in the association's submission.

“The focus of the sector during this process was to ensure the right balance between good consumer outcomes and a financial advice sector which isn’t encumbered by unreasonable red tape and adverse outcomes.

“We support regulations around disclosure made to clients – including on conflicts of interest, commissions and other incentives and disciplinary issues.”

The need for disclosure being limited to adviser fees, the products they offer advice on, their conflicts of interest, commission they receive, and how clients can contact dispute resolution services is something Financial Advice is please about.

““However, we are pleased to see a change from the draft disclosure requirements that now only requires disclosure of these matters when they would likely materially influence a client’s decision. This is something we strongly recommended in our submission to ensure disclosures were meaningful and not overwhelming for consumers.

“We were concerned the draft regulations required disclosure of product fees charged by unrelated third parties (e.g. insurance premiums) so the removal of the requirement to disclose fees for ‘acting on the advice’ was a sensible move."” Click here to read more

In other news:

FSC: FSC 2020 Awards - Nominations Open

FMA: FMA takes CLSAP NZ to court over alleged anti-laundering breaches

Westpac: Westpac to launch carbon footprint tracker

BNZ: BNZ launches banking support for domestic, economic abuse survivors


New financial advice regime start date set, disclosure regulations resources, and more daily news

After being delayed because of COVID-19, MBIE have announced that the new financial advice regime will begin on 15 March 2021. In addition to the new date being set, the Government has set new disclosure requirements as part of the Financial Services Legislation Amendment Act to ensure that customers have the ability to make more informed decisions. Advisers will be required to disclose their services and other relevant information. This will allow potential clients to decide if the service on offer is right for them.

“The new disclosure requirements will require businesses and individuals who give financial advice to disclose important information about their services to their clients.

“The disclosure requirements are set in regulations under the Financial Services Legislation Amendment Act, which introduces a new regulatory regime for financial advice,” said Sharon Corbett, manager financial markets at the Ministry of Business, Innovation and Employment.”

On disclosure, the details confirm that as expected a progressive disclosure regime is being put in place, much along the lines suggested by the consultation. We think that is good - it makes sense, and it allows the right level of information for each stage of the sales process. It will not please everyone, some prefer the certainty of fixed requirements that are all dealt with at a specific point in time, especially if they have a very simple (and short) advice process.

UPDATE: because I was asked: yes, dollar disclosure of commission payments is required. A range might be disclosed at one point and a specific figure disclosed when known. 

More important, perhaps, is the start date for the new regime. I cannot underline enough how important compliance assurance is as you come up to this date. There are some simple steps you can take to get yourself to a point of comfort. 

  1. Refer to a detailed list of all the reference standards required to achieve compliance - call or write to ask me for such a list if you need one.
  2. Conduct a gap analysis against the full range of requirements.
  3. Start at the top - ensure your governance structures are in place, this is the engine that drives all effective compliance practice
  4. Fill in the processes required against the gaps identified, reporting into your governance process on a regular basis

Much of the commentary does not link directly to the documents, so here is a good digest of links for you: 

The MBIE media release: https://www.mbie.govt.nz/about/news/disclosure-requirements-and-commencement-date-set-for-new-financial-advice-regime/

The disclosure requirements page on MBIE's website: https://www.mbie.govt.nz/business-and-employment/business/financial-markets-regulation/regulation-of-financial-advice/regulations-to-support-the-financial-services-legislation-amendment-act/disclosure-requirements/

The overview of the disclosure regulations: https://www.mbie.govt.nz/dmsdocument/11508-regulations-setting-out-disclosure-requirements-in-the-new-financial-advice-regime-overview

The FMA's media release on the start date for the new regime: https://www.fma.govt.nz/news-and-resources/media-releases/fma-welcomes-start-date-of-new-financial-advice-regime/

The regulations in full: http://www.legislation.govt.nz/regulation/public/2020/0132/latest/whole.html#LMS177125

 

In other news:

Fidelity Life: New Learning Management System for product accreditation and eLearning to be launched soon, Fidelity Life: New Sharecare challenges will begin 1 July 2020

Fidelity Life: Golden Life Plan will be no longer be offered to new applicants from 1 July 2020

Financial Advice NZ: Bring in the Experts: Disclosure Requirements with MBIE

Mixed response to full licensing details


AMP Life sale, and more daily news

After yesterday’s announcement of RBNZ approving the sale of AMP Life to Resolution Life, some consumers raised concerns that the conditions of the sale won’t be enough to protect the interests of customers.

“There are fears the conditions the Reserve Bank (RBNZ) has put on the proposed sale of AMP Life to Bermuda-based private equity firm, Resolution Life, don’t go far enough to protect the interests of the insurer’s 200,000 New Zealand policyholders.”

One policyholder expressed his fears that the contract terms were general and that Resolution Life wouldn’t have an incentive to uphold goodwill if they don’t write new polices. As a result, claims and bonuses would be at risk of not being paid out.  

“The RBNZ’s general manager of financial stability, Geoff Bascand, said: "Because AMP Life is a branch of an Australian business and intended to be in ‘run-off’ and not write new business, special arrangements were needed for the security of New Zealand policyholders."

However, an AMP Life policyholder with a background in investment banking, Andrew Body, was concerned that without writing new policies, Resolution Life wouldn’t be incentivised to maintain goodwill in the market. Accordingly, he worried any claims and bonuses owed to policyholders could be put at risk.

While Resolution Life will be required to honour existing policies, Body said contract terms were often “very general” and relied on “trust”.”

I do not think this is realistic. The requirement for a trust and Policyholder Advisory Committee will provide a level of additional protection for policyholders, and reflects the kinds of governance requirements around conduct soon to be implemented across the sector, when new conduct law is eventually passed. The problem for AMP policyholders is a mirror of the problem for AMP. Long-term contracts make it hard for both parties. For the insurer, the clients you end up with on your books after 20, 30, or 40 years can have quite different characteristics to those you underwrote all those years ago. The situation for policyholders is that AMP has decided it would prefer not to be in the life insurance business. Resolution Life wants to be. Even though Resolution Life will not be writing new business, their investment will fail if they experience very high levels of lapses - the substantial existing premium and the price they paid to own it are both substantial stakes in the future of the book. 

Click here to read more

In other news:

Monetary Policy easing to continue

Financial Advice NZ: Consultation: Trusted Adviser Financial Advice New Zealand

FSC: proposed standard licence conditions for financial advice provider full licences


Market movements: what changes the size of the market for insurance?

The market for insurance is affected by three main factors: 

  • The size of the eligible population 
  • Their need for insurance
  • Their ability to pay for it

Rob Dowler, our preferred compliance consultant for large projects, suggested that I expand on the role that immigration plays in the growth in our market and whether that places constraints on whether people can buy insurance. 

Some additional information about how the size of the eligible population changes can help to put this into the right context. Showing data from 2018 to illustrate how a more 'normal' year works, accepting that 2020 is far from normal and there has been a sharp rise in both long-term departures and long-term arrivals, and a sharp decline in short-term departures and arrivals.

New working age residents added about 44,000 people, plus there were about 62,000 children who reached working age. This addition of just over 100,000 was somewhat off-set by 44,000 people who reached retirement age and about 8,000 people who died during working life. These movements exclude those people on student or short-term working visas. Although a number of students eventually become permanent residents, they are only counted when they achieve that status. 

We have tended to assume that demand for insurance is constant on a per person basis. Of course, it isn't. Usually debt increases the demand for cover, but not all debt is equal. Household debt is usually insured, consumer credit debt often isn't - so as home ownership rates have dropped due to the high cost of housing, there has been some hit to demand. But this is a very small reduction in demand compared to the size of the underinsurance gap - which we estimate to be about a million people who are in-work. 

The ability to pay for cover receives only modest attention, usually as we consider the cost of cover relative to age. It will receive additional attention as the economic crisis associated with the COVID-19 pandemic plays out in New Zealand. Unemployment is forecast to rise from a little over 4% to about 10% under even the best case scenario. We can expect to see a reduction in average household income for the current quarter and very slow real wage increases in the next couple of years. Limiting the ability of New Zealander's to pay for cover will cause an increase in lapse rates. The interaction of the high cost of housing and lower wage growth will constrain a proportion of budgets. 

 


Deeper look into AIA Vitality Business and Community Grant, and more daily news

AIA announced their AIA Vitality Business and Community Grant earlier this month. The grant is set up to support adviser initiative to encourage health and wellbeing.  Advisers are able to find inspiration by referring to a national think tank that New Zealanders will be adding to. “To help inspire you with ideas to help create a healthier community, AIA will be asking New Zealanders to submit their ideas from 29 June.  This will create a national think tank which you can then use to inform your own ideas or to adapt for your submissions.”

There is a process for selecting successful applications, but those most likely to succeed will be increasing engagement within their communities through activities including:

  • “Hosting events to create awareness of health challenges in your community.
  • Investing in digital marketing and promotion of healthy living through podcasts or a video series.
  • Developing marketing activities that will drive the awareness of health and wellbeing in your community.
  • Delivering educational opportunities to increase the importance of health and wellbeing for New Zealanders.”

More details available here

In other news:

CFFC: The Commission for Financial Capability launched new resources to help students gain NCEA credits

RBNZ: The Reserve Bank resuming review of the Insurance (Prudential Supervision) Act 2010

AIA: how MIP works adviser resource


AMP sale gets the green light, and more daily news

After spending the past 18 months reviewing the sale proposal, the Reserve Bank announced that they have approved the sale of AMP Life to Resolution Life. Customers with existing policies with AMP Life will be unaffected by the transaction.

“The Reserve Bank has approved the proposed sale of AMP Life to Resolution Life, in a revised arrangement that is subject to a number of conditions imposed to protect policyholders.

The Reserve Bank has been reviewing the proposed transaction and consulting with the parties involved over the past 18 months to ensure the deal met our requirements, Deputy Governor and General Manager for Financial Stability Geoff Bascand says.”

For the sale to go ahead a Trust was established. This is to ensure objectives are met, industry dynamics are positive and that there is insolvency protection. Additionally, the Trust is set to ensure localisation. Capital and assets will be held in New Zealand and Resolution Life New Zealand (RLNZ) will be established.

“A bespoke trust model has been established that ensures supervisory objectives are better met, future industry dynamics are generally more positive, and there is additional protection in the event of insolvency - one of the key risk considerations that we have been seeking to mitigate,” Mr Bascand says.

The Trust is required to hold capital and assets in New Zealand that help provide long-term security for policyholder benefits or investments, where relevant. The Trust will be under the management and scrutiny of relevant officers in New Zealand, who have appropriate influence and authority in respect of the New Zealand operations, for the purpose of securing equity across all policyholders.

In addition, the model will see the establishment of a new, locally incorporated insurer Resolution Life New Zealand (RLNZ). The RLNZ board will have a majority of New Zealand resident, independent directors. RLNZ will act as Trustee to the Trust and will effectively manage the assets held in the Trust.”

In other news:

Kepa: Four Adviser Resource Centre Services were available to Kepa Members for free July – September

FSC Connect webinar - Customers, complaints and claims - what have we learnt from COVID-19?

FSC webinar: Compliance with Financial Advisers Act between now and March 31 2020

FSC webinar: Preparing contracts with authorised bodies, advisers, contractors and other staff or suppliers


Cancer diagnosis concerns

About a five minute read, this article covering concerns about catching up on delayed cancer diagnosis caused by the lock-down is well worth the read. I expect that we will not know the full impact (or which of the views in the article is more correct) for some time - possibly years. It is worth considering that the options were grim - without a strong response to COVID-19 then many people with cancer, who are immune compromised, would have died from COVID-19. The choice made may well have been the best possible choice, which still doesn't make it any easier for people concerned about the impact on their cancer prognosis of a delayed diagnosis.