The Insurance Brokers Association of New Zealand (IBANZ) has attacked the NZ Government’s plan to charge the insurance industry to cover the cost of regulating it.

“The Government is setting up a pricing model without all the facts,” CEO Gary Young told insuranceNEWS.com.au.

“It would be better to spread the costs widely now and revise it later when the Government knows how many brokers and advisers there are in New Zealand.”

Although brokers and financial advisers must register with the Financial Services Providers Register, final numbers are not yet known.

Mr Young says the Government has admitted to this fact in the consultation paper on the third-party charging proposal, which contains a proposal to charge authorised financial advisers a levy and registration fee of $NZ910 ($704) a year.

A qualifying financial entity (QFE) will pay an annual fee of $NZ8000 ($6194) a year plus the individual Authorised Financial Adviser charges.

Mr Young says the QFEs will be charged at a lower rate than a non-qualifying insurance company, with many advisers having to pay all the various fees for its intermediaries.

“We think it might be better to be a QFE, as it will be cheaper,” he said. “These charges could mean the end of the independent adviser which is not in the consumer’s interest.”

Mr Young says the Government should be looking at more options to fund compliance, but IBANZ is also questioning why the private sector should pay so much of the bill.

“What the Government is proposing is not in the interests of the consumer,” he said. “We will have to pass on these costs in dollar terms, not cents.”

The industry has until July 8 to respond to the proposals, which Mr Young says is too short a timeframe.