Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Major problems in life insurance industry

29 January 2019

Major problems in life insurance industry

Major problems in the life industry insurance are leading to consumers being sold poor-value products and paying higher premiums.

Consumer NZ chief executive Sue Chetwin said the Financial Markets Authority (FMA) and Reserve Bank review of the industry has found “extensive weaknesses” in the life insurers’ systems and a lack of focus on good customer outcomes.

Ms Chetwin said the review confirms problems in the industry that Consumer NZ’s own research has highlighted, including the major risk that commission-based selling has for consumers.

“Sales incentives increase the risk consumers will be sold a product simply because the sales rep will earn another commission. There may be no benefit to the consumer at all,” she said.

The report also singles out products, such as funeral cover and credit card repayment insurance, that provide very poor value to consumers.

“Our investigation of these products shows they provide limited benefit and can cost consumers more than the value of the cover.”

Ms Chetwin said major changes were needed in the industry to improve consumer protection. This needed to include stronger supervision of insurers and a shake-up of complaints schemes for the industry.

“The review shows insurers are doing an appalling job at addressing problems in the industry. The protections so far put in place for consumers aren’t working and we can’t rely on the industry to put its own house in order,” she said.

Insurers have been given to 30 June 2019 to report to the FMA and Reserve Bank on what they’re doing to address problems.

Consumer NZ is calling for reform of the insurance industry to be a priority.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Industry Report: Growing Interactive Sector Wants Screen Grants

Introducing a coordinated plan that invests in emerging talent and allows interactive media to access existing screen industry programmes would create hundreds of hi-tech and creative industry jobs. More>>

ALSO:

Ground Rules: Government Moves To Protect Best Growing Land

“Continuing to grow food in the volumes and quality we have come to expect depends on the availability of land and the quality of the soil. Once productive land is built on, we can’t use it for food production, which is why we need to act now.” More>>

ALSO:

Royal Society: Calls For Overhaul Of Gene-Technology Regulations

An expert panel considering the implications of new technologies that allow much more controlled and precise ‘editing’ of genes, has concluded it’s time for an overhaul of the regulations and that there’s an urgent need for wide discussion and debate about gene editing... More>>

ALSO:

Retail: Card Spending Dips In July

Seasonally-adjusted electronic card spending dipped in July by 0.1 percent after being flat in June, according to Stats NZ. Economists had expected a 0.5 percent lift, according to the median in a Bloomberg poll. More>>

ALSO:

Product Stewardship: Govt Takes More Action To Reduce Waste

The Government is proposing a new way to deal with environmentally harmful products before they become waste, including plastic packing and bottles, as part of a wider plan to reduce the amount of rubbish ending up in landfills. More>>

ALSO:

Earnings Update: Fonterra Sees Up To $675m Loss On Writedowns

“While the Co-op’s FY19 underlying earnings range is within the current guidance of 10-15 cents per share, when you take into consideration these likely write-downs, we expect to make a reported loss of $590-675 million this year, which is a 37 to 42 cent loss per share." More>>

ALSO: