AIA increases premiums by 13%
Premiums on AIA New Zealand Life Cover policies will increase by 13% for new business and adviser commission rates will not be affected by the changes.
Tuesday, June 1st 2010, 1:18PM
by Jenha White
The new life insurance legislation, which was introduced in draft form nearly two years ago, will significantly increase the tax paid by life insurers from July 1.
AIA has determined that there will be no change to premiums for existing customers.
AIA head of distribution and marketing Darrin Franks says the 13% increase is based on analysis as well as consideration of what its competition were doing.
He says adviser commissions did not have a lot of pressure put on them because of the tax changes as AIA hasn't been competing at the top of the commissions game and therefore felt comfortable holding them where they were.
AIA chief executive Wayne Besant says each insurance company has to decide how to manage the impact of this taxation so that distribution of the extra cost is fair and equitable.
"We wanted to keep the process as simple as possible.
"The increase will only apply to new Life Cover policies, where the new tax will be incurred. Grandparenting rules will apply on all existing Life Cover policies for five years."
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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