Cigna announce product enhancements, and more daily news

Cigna has announced that they have enhanced aspects of Income, Mortgage Repayment, Complete Disablement, Trauma and Premium Covers. The enhancements include changes in wording and benefits. The changes were made effective as of 11 November 2020. The changes are designed to give customers more flexibility during the claims process as well as allowing customers with a low-grade tumor or a listed progressive conditions such as Alzheimer’s disease to claim.

“We’ve made enhancements to a number of definitions and benefits across our Income, Mortgage Repayment, Complete Disablement, Trauma and Premium Covers.

Among the changes is the addition of an alternative 10-hour disability definition to our base Income, Mortgage Repayment and Premium Covers. This will give your customers more flexibility when applying for a total disability claim.

The enhancements also include removing the severity requirements on the full Trauma benefit criteria, making it easier for your customers with a low-grade tumor or a listed progressive condition such as Alzheimer’s disease to claim.”

Below is a full list of benefit changes.

“We have made the following enhancements to our Assurance Extra Income Covers, Mortgage Repayment Cover and Premium Cover:

  • Adding an alternative (10 hour) Total Disability definition

Assurance Extra Income Cover, Mortgage Repayment Cover & Premium Cover

We’ve introduced an alternative total disability definition to our base covers where if an illness or injury causes the life assured to be unable to work more than 10 hours a week in their pre-disability occupation, they may still be considered for a Total Disability Benefit. Any income they’ve earned from working within these 10 hours, will be subtracted from the benefit amount payable.

  • Total Disability Benefit & Partial Disability Benefit –Removal of the 14 days & 7 days total disability criteria

Assurance Extra Income Cover & Mortgage Repayment Cover

We’ve removed the 14 days initial period of total disability criteria under our Total Disability Benefit, and the 7 days initial period of total disability criteria under our Partial Disability Benefit. This has improved the claim-ability of this cover, meaning the life assured is more likely to qualify for a claim payment.

  • Total Disability Benefit – removal of limitation for concurrent Mortgage Repayment Cover and Income Cover claims

Assurance Extra Income Cover

We’ve removed the limitation (added in April 2019) under all our Income Covers which reduces the Income Cover benefit after 6 months if the life assured is also getting a Mortgage Repayment Cover benefit for the same disability.

  • Recurrent Disability Benefit – Extending period of recurrence from 6 months to 12 months

Assurance Extra Income Cover, Mortgage Repayment Cover & Premium Cover

We’ve extended the period of recurrence to 12 months under all Assurance Extra Income Covers, Mortgage Repayment Cover and Premium Cover regardless of the selected payment term. Previously the period of recurrence had to be 6 months if a payment term of 2 years or 5 years was selected under Income Cover or Mortgage Repayment Cover.

  • Return to Work Benefit – adding an additional scenario for claim

Assurance Extra Income Cover & Mortgage Repayment Cover

We’ve added an additional scenario for claim, where, if the life assured has been accepted for a Vocational Retraining or Rehabilitation Benefit that resulted in them returning to full time employment or self-employment, they may now get extra financial support under the Return to Work Benefit

  • Premium Cover – Refund premiums paid during the waiting period upon acceptance of a Disability Benefit claim

Assurance Extra Premium Cover

Going forward, if a Disability Benefit claim has been accepted, the premium waiver would be applied retrospectively from the first day of the life assured’s disability. This means that at the end of the waiting period, we will reimburse any premiums paid in respect to coverage during the waiting period.

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Legal and regulatory update for the life and health insurance sector

11 Nov 2020 – RBNZ announced a delay to the start of increases in bank capital until 2022 to allow banks continued headroom to respond to the effects of the COVID-19 pandemic and to support the economic recovery. In December, the Reserve Bank will consult about re-instating loan-to-value ratio (LVR) restrictions on high-risk lending with effect from 1 March 2021. Further, the restrictions on dividends and redeeming non-Common Equity Tier 1 (CET1) capital instruments put in place in April 2020 will be retained until 31 March 2021, or later if required. The Reserve Bank has also written to insurers to advise it has updated expectations on dividends. The Reserve Bank expects that insurers will only make dividend payments if it is prudent for that insurer to do so, having regard to their own stress testing and the elevated risks in the current environment. https://www.rbnz.govt.nz/news/2020/11/further-regulatory-steps-to-promote-cashflow-confidence-and-stability

11 Nov 2020 – RBNZ Monetary Policy Committee agreed to provide additional monetary stimulus to the economy in order to meet its consumer price inflation and employment remit. The Committee agreed that the additional stimulus would be provided through a Funding for Lending Programme (FLP), commencing in December. The FLP will reduce banks’ funding costs and lower interest rates. The Committee will also continue with the Large Scale Asset Purchase (LSAP) Programme up to $100 billion, and retain the Official Cash Rate (OCR) at 0.25 percent in accordance with the guidance issued on 16 March. https://www.rbnz.govt.nz/news/2020/11/more-monetary-stimulus-provided

11 Nov 2020 – NZX confirmed 10 Dec 2020 as the date for the Exchange’s new separate regulatory agency, NZ RegCo, being a stand-alone, independently governed, agency performing all frontline regulatory functions in support of NZX’s statutory obligations as a licensed market operator.” Implementation required various amendments to be made to NZX’s market rules and the NZCDC settlement system rules, also coming into effect on 10 Dec 2020. https://www.nzx.com/announcements/363019


How many people have never had a conversation about life insurance?

Okay, I know that life insurance is not quite the compelling subject for others as it is for me, but AIA recently conducted some research which revealed a quite astonishing fact: 

"... two thirds of Kiwis having never had a conversation about life insurance..." 

Thanks to Nick Stanhope, CEO of AIA, for bringing that to our attention. It is a wake up call for the sector. Of course, some people have had a conversation and forgotten it - which is, when you think about it, the same thing. Remember the proverb: "To know, and yet not act, is not to know". Some people are unable or simply do not require cover - but to be unaware of it entirely is a massive failure on the part of the industry. If there is responsibility to be attached to this concern, then it is the responsibility of the industry, not the consumer, to provide a remedy. 


Southern Cross launches Cancer Cover Plus, and more daily news

Southern Cross has announced the launch of Cancer Cover Plus. The new cover is intended to give members broader chemotherapy options. Cancer Cover Plus will give members the option to upgrade to Chemotherapy 100, which has a benefit limit of $100,000 or Chemotherapy 300 which has a benefit limit of $300,000. Additionally, members will have the choice to access non-Pharmac cancer drugs.

“Southern Cross Health Insurance (SCHI) is launching competitive cancer care cover to give members more choice when it comes to chemotherapy, including increased access to cancer drugs not subsidised by Pharmac.

SCHI’s new Cancer Cover Plus has two optional upgrades - Chemotherapy 100 (benefit limit of $100,000) and Chemotherapy 300 (benefit limit of $300,000) – to help members during their cancer treatment journey. This covers the cost of Pharmac and non-Pharmac, Medsafe indicated chemotherapy drugs and their administration for the treatment of cancer.”

Nick Astwick has said that the new cover has been designed with the needs of members in mind. Cancer Cover Plus has been developed to complement the unlimited surgical and radiotherapy benefits. Astwick notes that the cover was created so more New Zealanders have faster and more access to affordable cancer treatment options.

“We understand that a cancer diagnosis, or the fear of one, can be scary for people so we wanted to give members peace of mind by providing them with more cancer cover options.

 

“We have developed them to complement the unlimited surgical and radiotherapy benefits we offer in most of our plans, and this will help to provide a comprehensive package to the vast majority of our members who have these products and also tell us their main concern is cancer care,” he said.

 

The Southern Cross Healthy Futures Report 2020 revealed that 79 per cent of New Zealanders are concerned about not having access to cancer treatment services and 59 per cent are worried about experiencing or developing an illness or disease.

 

“Not all cancer drugs are funded by Pharmac which makes them unaffordable for many people. We created this new cancer cover so Kiwis could have faster access and more treatment options to receive potentially lifesaving chemotherapy drugs if they need to,” said Astwick.” 

In other news:

At goodreturns: Adviser consultancy firms say full licensing provisions bring mandate for change

From Partners Life: Do your self-employed clients have the right income cover? 


FSC release new disclosure guide, and more daily news

The FSC has published a new disclosure guide. The guide is designed to help advisers meet obligations and provides information on what to disclose and what is not necessary to disclose. The FSC has focused on life insurance, investment, mortgage advice. The document examines the different disclosure requirements by using Kowhai Advice and Pohutukawa Advice as examples. The guide provides information on:

  • general requirements
  • publicly available information
  • when the nature and scope of the advice is known
  • when making a recommendation
  • when a complaint is received

Read the FSC Disclosure Guidelines

in other news

FMA: FMA acknowledges "difficult and stressful" year for advisers

Advisers ‘best placed’ to help clients understand life insurance


Legal and regulatory update for the life and health insurance sector

10 Nov 2020 – The Financial Advisers Disciplinary Committee website has again been amended such that the “Next Hearing” has been changed from 19 Nov 2020 to Thursday, 10 Dec 2020 at 9:00 a.m., with no further information provided other than details of the venue. https://fadc.govt.nz/upcoming-hearings/

6 Nov 2020 – The Privacy Commissioner published on the website details relating to the serious threat to public health or safety exception where the collection, use and disclosure of personal information is needed to combat a serious threat to public health or safety, such as Covid-19. https://www.privacy.org.nz/blog/privacy-covid-19-and-the-serious-threat-to-public-health-exception/

9 Nov 2020 – FSC released a new Disclosure Guide for the financial advice community. https://www.fsc.org.nz/site/fsc1/Reports/Financial%20Services%20Council%20-%20%20Disclosure%20Guidelines.pdf


Partners remove occupation class restriction and mental health questionnaire, and more daily news

Partners Life has announced that the automatic COVID-19 occupation class restriction that were previously applied to disability benefits will be removed. The disability benefits that had this restriction include Income Cover, Mortgage Repayment Cover, Household Expenses Cover, TPD Cover and TPD Covered Condition under Trauma Cover. The change will automatically be applied to all new business regardless of the date the application was received. For customers who have the restriction in place, Partners Life will remove the restriction on all claims made after 9 November 2020.

“We are removing the automatic blanket COVID-19 Occupation Class Restriction applied to disability benefits, including Income Cover, Mortgage Repayment Cover, Household Expenses Cover, TPD Cover as well as the TPD Covered Condition under Trauma Cover.

This restriction will be removed immediately for new business and will be removed instantly for all existing customers to whom it was applied in respect to claims arising from today’s date.

This simply means our policy wordings will apply once more without an endorsed restriction, allowing clients who have been unemployed prior to the date of disability, to have their normal occupation class apply for 12 months after the date of unemployment.

So, from today all disability policies issued will no longer have this automatic blanket endorsement applied to them, irrespective of when the application form was received. Meaning for any business currently in the pipe-line, you don’t have to do anything for this to happen.”

Similarly, the emergent mental health questionnaire requirement will be removed as a requirement for all disability benefit applications. If an applicant is assessed as being at risk of developing a reactive mental health issue an emergent mental health exclusion will be applied during the underwriting process.

“We will no longer be requiring a mandatory blanket emergent mental health questionnaire to be completed for all disability benefit applications.

Please note, however, if an applicant for disability benefits is assessed as having a significant risk of developing a reactive mental health issue in the near future as a result of their individual employment situation, our underwriters may still use an emergent mental health exclusion as one of the special terms to be offered to that customer. This provides us a tool to accept cover, which otherwise might be considered too risky.”

In other news

Financial Advice: Bring in the Experts: Navigating commercial contracts in the new Regime

FSC: Understanding conflicts of interest and managing gifts and incentives webinar


FINSIA networking breakfast with Geoff Bascand, and more daily news

The Financial Services Institute of Australasia (FINSIA) is set to host a breakfast networking session and a review of the latest Financial Stability Report. Geoff Bascand, RBNZ Deputy Governor, will be in attendance. During the session Bascand will discuss the current state of the economy and RBNZ projections as well as answering questions stated below. The event will be held on 27 November 2020 with a 7.15am start. The event will take place at EY Building, 2 Takutai Square, Britomart, Auckland 1010. Click here to register

“FINSIA is pleased to welcome our members back to face to face events with a complimentary networking breakfast followed by an update on the latest Financial Stability Report.

The Deputy Governor of the Reserve Bank of New Zealand, Geoff Bascand will provide a picture of the New Zealand economy, how it is performing and where the RBNZ thinks it is heading next.

The Deputy Governor will answer these questions and more:

  • The effect of the wage subsidy and mortgage deferrals on the economy – where are we really at?
  • Rising pressures in the housing market in terms of lending and borrowing behaviour – will the Central Bank bring back LVRs?
  • What happens to the economy if we are living in a world of negative interest rates?” Click here to find out more

In other news

FSC: Launch of Money & You 3 and 2020 A Year In Review

FSC: FSC Connect: Data - Creating Industry Insight

FSCL: New board member announced at FSCL

nib: nib New Zealand’s figures “a bit down,” but on track


Insurers set to pay assisted dying claims, and more daily news

Various insurers have confirmed that terminally ill customers who choose to undergo assisted dying will be eligible for claim payouts. Before the referendum AIA was the only insurer to state that it would pay if the referendum passed. Recently, Cigna has said that it would pay out if assisted dying became legal and customers decided to end their life. Jane Barron, Pinnacle Life spokeswoman, noted that customers with a terminal illness are entitled to claim if it has been stated by a doctor that they have 12 months or less to live; so those that would have an assisted death are already entitled to claim.

“AIA, New Zealand’s largest life insurance company, said it could still settle claims if ACT MP David Seymour’s End of Life Choice Act became law, but others were yet to settle on their stance at that time.

 

With preliminary figures from the Electoral Commission on Friday showing 65 per cent of New Zealanders voting in favour of the End of Life Choice Act, terminally ill adults with fewer than six months to live will be able to request assisted dying.

 

One of the life insurance companies contacted by Stuff this week, Cigna, said it would pay out if assisted dying became legal and policy holders took up the option of dying with assistance. Cigna chief executive Gail Costa said the End of Life Choice Act stated that a person who died as a result of assisted dying would be taken to have died as if assisted dying had not been provided, or have died from the terminal illness from which they suffered.

 

“Provided a policy holder who takes up the option of dying with assistance meets all terms and conditions, they will be entitled to claim.”

 

And Pinnacle Life spokeswoman Jane Barron said people with a terminal illness were entitled to claim on their Pinnacle life insurance policy if their doctor said they had 12 months or less to live.

 

“Therefore, anyone who is in the situation where they are considering an assisted death is already in a position to be able to make a claim.”” Click here to read more

Chatswood thinks it likely that all the providers of the best life cover will include payment on this basis, as they already make advance payments for terminal illness, which is decided on terms that probably include more cases that those envisaged by the End of Life Choice Act, based on modelling shared in our recent Quarterly Life and Health Sector review. 

 

In other news

FMA: FMA appointments reflect serious move into fintech space

Southern Cross: ProCare and Southern Cross join forces to enter virtual healthcare market

FSC: FSC Enjoys A Solid Year Of Growth Despite Challenges

Advisers Raise $12.5k For Fiordland Conservation Trust’s Kids Restore The Kepler