by David Chaplin
A spokesperson from Dalziel's office told Good Returns that the Minister had considered a joint industry body paper put forward in August but she still favoured disclosure of insurance commissions to be included in as part of the coming financial adviser regulatory regime."She hasn't altered her position," the spokesperson said. In the paper presented to Dalziel in August, the Institute of Financial Advisers (IFA), the Professional Advisors Association (PAA), and the Life Brokers Association (LBA) argued that disclosure of insurance commissions was unnecessary and would probably exacerbate New Zealand's under-insurance problem.
The three industry bodies said if the government did not back down on the life insurance commission disclosure issue there was "the potential to turn the tide of the life insurance industry from one of support to one of opposition to the regulations".
In a follow-up letter to Dalziel the joint industry bodies said if the government insisted on disclosure of insurance commissions "the loss of advisers would almost certainly exceed our current predictions of 15%, leading to a situation of restricted access to advice based life insurance for consumers".
Dalziel has not responded formally to the earlier proposals, however, in the latest letter the industry bodies reiterated their argument that there should not be "disclosure of information for disclosure's sake".
"A strength of the proposed co-regulatory model is that industry has the opportunity to actively participate in the development of the regulations," the letter says. "To date, we have been encouraged by the Ministry's willingness to accept industry input into the regulations. This has resulted in proposed regulations that are practically based. We trust that the industry's views will continue to be valued in terms of the development of practical regulations that materially benefit consumers."
A draft of the financial advisory legislation could be introduced into Parliament as early as December, Dalziel said eariler this year.
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