Growing dissent in Financial Services Council (FSC) ranks has seen another high-profile resignation this week with insurer Partners Life making its way to the exit.
As originally reported on Investment News NZ (IN NZ) on November 2, AMP resigned the insurance and investment industry body earlier this year, with the 12-month notice period due to expire in six months. The ASB-owned Sovereign since confirmed it, too, had given notice to the FSC.
In a lengthy note to advisers sent out today, Naomi Ballantyne, head of maverick insurer Partners Life, said the group had resigned the FSC in protest at its soon-to-be-released report on NZ’s life insurance industry.
Ballantyne said in the note the life insurance report – authored by actuarial consulting firm Melville Jessup Weaver (MJW) – had been “hastily approved” by the FSC.
She said the resulting report showed a “particular bias” against commission-driven third-party distribution of life insurance products in NZ.
“As a result Partners Life has been consistently against the FSC allowing the report to be released in association with the FSC brand – which would effectively add significant gravitas and importance to what would otherwise be simply a report outlining the personal opinions of the authors,” she said in the note. “While there were a number of member companies who shared some of Partners Life’s concerns with the report, it became clear that we were not going to be as successful as we wanted to be in our campaign to distance the FSC from the report in question, leading us to instead have to distance ourselves from the FSC.”
The MJW report was commissioned by the FSC following a similar exercise in the Australian market. Last week the Australian government approved measures to introduce a cap on upfront life insurance commissions of 60 per cent (to be phased in over a couple of years) while limiting ongoing product payments to 0.2 per cent of premiums.
Under the reforms, life insurance companies would be able to claw back commissions if advisers ‘churn’ policies within two years of the initial sign-up.
Peter Neilsen, FSC chief, said: “I don’t comment on member activity.”