The Financial Services Council (FSC) has taken another related industry body under its wing in an agreement with the Health Funds Association (HFA) inked last week.
Under the merger, officially due tomorrow (Tuesday December 1), the FSC will absorb the HFA membership while creating a new health insurance committee in the wider group.
Established in 1989, the HFA last reported six full members (including one existing FSC member – AIA NZ) and two associates, Healthcare Plus and the Accident Compensation Corporation.
Following a very long engagement, the FSC formally merged with employer superannuation and KiwiSaver industry body, Workplace Savings NZ (WSNZ), last year, bringing its total membership (including associates) to over 80.
But the HFA hook-up was a much shorter process, according to FSC chief, Richard Klipin, with serious merger talks launched about five months ago.
Similar to the WSNZ merger rationale, Klipin said the FSC and HFA shared some common issues, notably a “significant runway of regulatory change”.
“Health insurance is aligned to life insurance as well as workplace savings and KiwiSaver,” he said.
He said industry bodies required scale to achieve goals such as lobbying, research and setting professional standards.
“The FSC now has 90 members and that’s large enough for us to invest in all our focus areas,” Klipin said.
As with the WSNZ agreement, he said FSC fees would be scaled according to size for the former HFA members.
In a statement, Len Elikhis, HFA chair (and AIA NZ chief product and vitality officer), said: “The Health Funds Association of NZ members represent 80% of the health insurance sector and has a rich heritage of over 30 years… we look forward to playing an active part within the Financial Services Council.”
For the 12 months ending March 31, the HFA reported a more than $50,000 deficit on annual membership fee income of about $250,000.
Of the industry body’s almost $305,000 expenses over the 12-month period, $213,000 covered employment costs for the HFA, which is headed by chief executive, Roger Styles.
As at the end of March this year, the HFA reported more than $175,000 in net assets.
Styles says in the group’s 2019 annual report that the period “ended with some consolidation in membership for HFANZ, along with some of the challenges this presents for a member-based organisation, not just in terms of resourcing but in maintaining a diversity of membership and viewpoints”.
Meanwhile, the FSC reported a net surplus of $68,500 on total revenue of $1.9 million for the year to June 30 last year: over the same period in 2018, the industry organisation notched up a $200,000 surplus on revenue of $1.2 million.