The Insurance Council of New Zealand (ICNZ) has backed changes to the country’s financial framework, arguing greater transparency will produce long-term benefits for the industry.

Commerce and Consumer Affairs Minister Paul Goldsmith announced the raft of reforms last week, as part of efforts to improve industry standards.

Key changes to the Financial Advisers Act and the Financial Service Providers Act (FSPA) include:

• Creating a level playing field for the provision of advice, by requiring all advisers to put consumer interests first and meet competency requirements;
• Improving transparency by introducing simple disclosure requirements and useful terminology;
• Encouraging innovation and enabling the provision of online robo-advice; and
• Requiring businesses to demonstrate a strong connection to New Zealand to be registered under the FSPA.

“We have been strong proponents of the need for insurance brokers… to be transparent about their remuneration, including soft commissions such as overseas trips and any conflicts of interest they have,” ICNZ CEO Tim Grafton said.

“We are pleased to see moves to do just that, because it provides consumers with informed choice and, importantly, supports greater trust and confidence in insurance and other financial products. A stronger focus on lifting conduct and ongoing professional development is welcomed.”

Insurance Brokers Association of New Zealand CEO Gary Young told insuranceNEWS.com.au he is pleased the Government “picked up on everyone having a code of conduct”.

The Government expects to introduce the legislation to Parliament this year.

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