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FSC welcomes FMA report on life insurance sales practices

The Financial Services Council – which represents life and income insurers, among others – welcomes today’s report from the Financial Markets Authority, on life insurance sales practices.

Wednesday, June 29th 2016, 11:00AM 1 Comment

FSC Executive Director, Owen Gill, says the report is providing a basis for discussion – between the FSC and the FMA, and insurers – on initiatives that are intended to address the FMA’s concerns.

“The FMA produced this report to focus on sales practices, including instances of ‘churn’ in the New Zealand life insurance market.

“The report covers only sales through authorised financial advisors and registered financial advisors.

“‘Churn’ occurs where consumers are sold replacement policies that are to the consumers’ material and direct disadvantage relative to the existing cover that they have. 

“The FSC believes churning of policies in this way is unacceptable.”

“More broadly, the FMA’s report, and the discussions alongside it, have allowed the insurers, and bodies like the FSC, to focus on what consumers should know, and understand, in buying life cover, and other initiatives that could be taken," Gill says.

“The FSC has had one constructive meeting with the FMA on these subjects and we anticipate further ones, in the near future.”

Tags: Churn

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Comments from our readers

On 7 July 2016 at 10:47 am Dirty Harry said:
“‘Churn’ occurs where consumers are sold replacement policies that are to the consumers’ material and direct disadvantage relative to the existing cover that they have."

That's a great definition of churn.
It's a definition that most members of the FSC would struggle with.

The hypocrisy here is breathtaking.

What smug condecention, spoken from a position where the main elements of the FSC in it's current form (a square table with a bank on each side) have successfully averted attention from the regulator once again.

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