ICNZ and its members are generally supportive of the proposed changes to legislation around financial institutions’ conduct, announced today by Minister Faafoi.
The changes come at a time when it’s clear some parts of the financial services sector are not meeting the conduct standards expected. General insurers support legislative changes to achieve this and are looking forward to seeing the detail of the legislation when it is released.
All ICNZ members adhere to the Fair Insurance Code, which already sets high standards of service and delivery.
We also welcome the news that sales incentives based on volume- or value targets will be prohibited, especially as they apply to insurance brokers. Legislation in this area will address the first-mover disadvantage insurers struggle with and in removing these incentives help customers have confidence that both the sales and underwriting teams behind their policies have their needs front of mind.
We do note that there are still impediments to insurers’ ability to be responsible for understanding customers’ needs are met when brokers’ contracts often prohibit insurers from contacting their insureds except via the broker.
It will be important that there is clarity around the overlapping regulatory regimes and that sufficient time is allowed for a smooth transition that minimises regulatory costs.