New Zealand insurers do not need to wait. They need to learn from and get ahead of issues that have emerged in Australia, according to Financial Markets Authority (FMA) regulation director Liam Mason.
During the recently held Insurance and Financial Services Ombudsman (IFSO) conference, Mason said issues around the Australian Royal Commission emerged and put a spotlight on the financial services industry like never before. Many of the specific recommendations by Commissioner Haynes are relevant to financial services businesses in New Zealand, he said.
“The core message that the Royal Commission report has for the financial services industry also applies here in New Zealand – that primary responsibility for misconduct lies with the entities concerned, which requires a close look at the culture, governance, and remuneration of financial services firms,” Mason said in his speech.
Mason mentioned New Zealand regulator’s own investigation of the potential misconduct in the banking and life insurance sectors. He noted that findings of the joint RBNZ/FMA exercise “present fairly dire reading,” and that response from insurers and the wider industry had been constructive. He told the audience that industry leaders have been engaging with the boards and chief executives of all the life insurers in workshops and at board meetings.
“We have had frank and open conversations, and I think that many see, as we do, that we have an opportunity in New Zealand to address the issues that we’ve uncovered before they lead to incidents that erode public confidence in the industry – before we find ourselves where Australia is today,” he said.
“I would encourage everyone to read the options paper in full, consider it, and then whatever your view, make a submission, so that your views can be heard,” he noted. “My overriding message, though, is please do not think that waiting for reform is the right thing to do now.”
The action plans being prepared for us by the end of June require full board ownership, Mason added.