ISI: We have not flip flopped on policy

The ISI says it has not flip flopped on policy, but it has made a simple suggestion to consult on the new Business Replacement Rules and Reinstatement guidelines because they didn't reflect the right intent, engagement and communication.

Wednesday, July 28th 2010, 10:48AM 3 Comments

by Jenha White

The guidelines were issued on 1 July, followed by an announcement five days later saying the ISI was prepared to consider making improvements after hearing concern in feedback from advisers.

"Reports in the press say we have flip flopped on the policy. We haven't flip flopped," said ISI chairman Sean Carroll at last weeks Institute of Financial Advisers (IFA) conference.

He also stated that the policy is not about churning or reducing distribution costs.

"The ISI is concerned about clients being disadvantaged in unfortunate cases where benefits under a replaced policy would have triggered a successful claim, but the new one did not."

The Association believes people have the right to replace their policies, but it wants to be sure they are basing those decisions on all the facts.

"We want transparency and a check on that process, we aim to re-engage with adviser groups to try and get consistency around it because we do need to get this right," said Carroll.

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

« UPDATED: ISI changes anti-churning policy after meeting advisers

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Comments from our readers

On 28 July 2010 at 11:58 am Note Bene said:

I am really interested in the legality of an industry body making commercial decisions after collaberation with all members. In my mind this is a 'cartel' Definition •A cartel is a formal (explicit) agreement among competing firms. It is a formal organization of producers that agree to coordinate prices, marketing and production.

Interesting...

On 29 July 2010 at 8:00 am Bill said:

Here in NZ the word is "Jandal".

On 30 July 2010 at 11:11 am John Smith said:

You have to ask what the ISI was trying to achieve apart from just trying to look like they were doing something to impress the government.
Will it reduce churn? No
Will it reduce replacement of business? No
Will it really benefit the client? No
What it will do:
Increase the appointment time with the client
Confuse the client
Create extra work for advisers and Life Companies

You have to wonder about the people who are on the ICI. I think the saying is true… the higher up you are the less oxygen you get.

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