Major players quit FSC

[UPDATED] AMP and Sovereign have confirmed they have resigned from the FSC.

Tuesday, November 3rd 2015, 6:01AM 3 Comments

by Susan Edmunds

Members now must give a year’s notice of their intention to resign, up from three months under the previous rules. The move is to spread restructuring costs across members more fairly.

AMP still has six months left to run of its membership.

Sovereign said it would cease to be a member on December 31. "Until this time it will be business as usual."

FSC represents most of the major players in the financial services sector including banks and insurers.

An industry source said: "Maybe the move away from Wellington wasn't such a great idea. The organisation was traditionally strong on advocacy on behalf of members. Hard to build lobby relationships when you're not in the building - or even in the town. If AMP do leave - and Sovereign follow - that's the two biggest life companies gone - so why would the other companies hang around?

It has been through a difficult financial period recently. It paid out two staff when it closed its Wellington office at the end of 2014 and had to pay a lease break fee equivalent to six months’ rent.

It has been alleged that the report it commissioned actuaries MJW to complete on churn cost $500,000.

The report has not been publicly released and is believed to have been sent back to Melville Jessup Weaver in draft form by the FSC council for more work.

The FSC has not confirmed the cost of the report.

FSC said the majority of its $1 million income in the 2014 year came from member subscriptions.

An AMP spokesman said of the decision to resign:  “We believe there is value in having an industry body that defines clear public policy on issues of relevance to the market and has a demonstrable policy on public savings and insurance.  We have been working with the FSC to try and achieve outcomes of public policy that are the best for all New Zealanders for a number of years now. 

“We are committed to working with FSC over the next six months to try and achieve this outcome.”

Tags: FSC

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Comments from our readers

On 3 November 2015 at 3:26 pm macca said:
Come on AMP, tell us why you are leaving the FSC? Governance issues??
On 3 November 2015 at 9:30 pm winstonkey said:
Perhaps the raison d'etre for the existence of FSC has passed.

A casual observer might observe that the big end of town gets much better lobbying power by hiring ex-politicians and ex-regulators.

Far more efficient.
On 8 November 2015 at 3:06 pm jturner said:
FSC gas become a field mouse rather than a gorilla. Looks like AMP have either stopped reporting new business or no one sells their paper any more

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