MBIE expects advisers to bear costs of regime change

In an impact statement prepared ahead of the announcement of proposed new changes, MBIE said the costs should not be ongoing but would come from changes being made to contracts and systems. They would apply to insurers and all intermediaries, including advisers, the ministry said.

The changes cover clients’ disclosure requirements, treatment of non-disclosure, unfair contract terms, improving consumer understanding of insurance policies and insurers’ duty of utmost good faith, among other issues.

General and life insurers have already tried to self-regulate on disclosure, with voluntary codes developed by the Financial Services Council and Insurance Council making clear how they should deal with cases where information has not been provided by a customer.

But MBIE said it was not sufficient.