Where to next?
18 Jul 2017
Clarification of two key areas of government policy, which are particularly significant for the future of IBANZ Members, is due out shortly.
Outcomes of the most recent rounds of consultation on both FENZ funding and adviser legislation are due to be revealed prior to parliament rising for the coming elections.
The financial adviser review produced draft legislation that raised issues on the difference between sales and advice. Many independent advisers felt the large providers, banks and insurers, should not be able to call their sales staff advisers if they could only sell in-house products.
A key issue for insurance brokers will be the competency requirements going forward. However these will not be included within the Act, rather the recently constituted Code Working Group will be addressing these matters. The make-up of this Working Group has caused controversy because it lacks advisers. Many see this as a serious omission in a body which will determine the future code of conduct for advisers.
Meanwhile the Department of Internal Affairs (DIA) has been working on recommendations for exemptions to levies under the new FENZ regime. The initial approach was to remove virtually all exemptions.
However recent indications are that DIA now accepts most of the existing exemptions were there for very good reasons and should be retained.
Other issues to be finalised in their recommendations include removing certain classes of insurance which have been unintentionally caught up in the levy regime. The insurance industry has been expressing concern that many policies including liability, travel, aircraft and marine are all caught by the wording of the legislation.
The aim of simplifying the levy regime has been lost according to industry representatives. The recommendations on what is to be excluded will need to be well thought out.
Transitional relief measures, the calculation of levy on insurance covering different property classes and the future requirements for information with levy payments are all issues to be addressed. Also a topic of interest to brokers will be the approach to mid-term adjustments once the current agreement expires in January 2019.