The CEO of the Insurance Brokers Association of New Zealand (IBANZ), Gary Young, says the key thing for next year is a continuation of the work already being done on two legislative reviews affecting brokers.
These are the Financial Advisers Act (FAA) review and the Fire and Emergency New Zealand (FENZ) review.
“Those have been ongoing issues for us, which impact quite strongly on our members,” Young told Insurance Business.
The FAA has been delayed until next year and Young said they were still waiting to hear what the legislation would include.
“There’s some fairly crucial issues regarding the transition from the old to the new and also while we’ve heard a lot of what they proposed for the new legislation, we haven’t yet seen an exposure draft of that.
“So until we actually see it we can’t be sure that everything they’ve talked about is going to be in there so that’s pretty crucial.”
The key concerns were exactly what the differences would be between an adviser and an agent and how that would work; how the entity licensing would work and issues around qualifications.
“We’ve had ongoing discussions about whether there should be a qualification requirement like there was for the AFAs when that was introduced, or whether it’s more appropriate to have a competency test which we believe is the right way to go,” he said.
“We’ve been talking to the Ministry and the regulator about ways of doing that and suggesting options as to how that might be done best, particularly for the people who’ve been in the industry for a long time.”
Another factor was the code of conduct.
“That will come into play again so it’s important that when the code committee looks at that the code is relevant to each sector and not just a generic one that doesn’t really apply,” Young said.
“We’re pretty keen to get involved with the code committee on making sure we get a relevant code.”
He was confident this shouldn’t be a huge leap from the present situation since IBANZ had been proactive and already adopted much of the existing code.
Regarding FENZ, Young, like many in the industry, has been vocal on several occasions about what he feels is wrong with the proposed changes regarding the funding of the Fire Service.
“We have said all along we support the concept of FENZ and what the Fire Service does but we don’t support the way it’s funded,” he explained.
Young said the 40% increase in rates to be introduced next year was ‘crazy stuff’ and would cause considerable underinsurance, something that was ‘completely contrary to what the Government should be wanting which is people taking responsibility for protecting their assets.”
“People are taking out insurance but the money they have for insurance will be diverted to funding the Fire Service and there will be very little left for them to actually buy the protection,” he said.
“We’re pretty opposed to the whole change to the funding, we don’t see why people who are responsible should be funding the Fire Service and we don’t see why they should be funding the merger of rural and urban.
“That’s a Government decision and the Government should pay for it. A huge part of this increase is due to the merger.
“Even though the Government is putting money in they want insured people to pay for it so the Government is contributing very little and insured people are paying for the whole lot.”
He added: “So we’re pretty negative on that whole thing, we think they need to take another look at it and start acknowledging people who are responsible.”
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