Don't hold your breath for life insurance reform

Despite the Financial Markets Authority and Reserve Bank's efforts over the past 18 months and Commerce Minister Kris Faafoi introducing the Financial Markets (Conduct of Institutions) Amendment Bill into Parliament in December, the short answer is - probably not.

The industry's economic significance is far from small: there are about four million life insurance policies in force with annual premiums totalling $2.57 billion.

The FMA and RBNZ exposed the industry's degree of dysfunction through their conduct and culture review and highlighted that, not only are commissions way out of whack with international comparisons, but churn is endemic.

The FMA has said only 2 percent of sales of life insurance policies are genuinely new, rather than just churn, or switching customers between policies to generate income for life insurance agents.