Brought to you by:

'Pathetic': Steadfast chief blasts insurers

Facebook Twitter LinkedIn Google

Steadfast MD and CEO Robert Kelly gave some insurers a roasting at the New Zealand insurance industry’s annual conference in Auckland this week.

Speaking at the Insurance Council of New Zealand (ICNZ) conference about the issues raised by the Hayne royal commission, he said: “Some insurers have a lot to answer for.”

Mr Kelly says the royal commission showed a number of “absolutely pathetic” products that were pushed onto an unsuspecting public by some insurers.

“It’s significant Hayne didn’t receive any complaints about brokers because of the strong legislation in place since 1986,” he said. “The result of good legislation that is well supervised and has great sanctions has meant brokers are not in trouble.”

However, Mr Kelly warns that the negative fallout from the royal commission has ensured broker renumeration “is now under the pump”.

Speaking from the perspective of New Zealand brokers, NZbrokers CEO Jo Mason told the conference commissions were not an issue in that country. “There’s not a lot of difference of commissions between insurers, so it’s really not an issue.”

She says brokers are “doing a good job for their clients” but their achievements are not well documented. “Brokers need to demonstrate their expertise to not only their clients but also to regulators.”

The new code of practice being developed for New Zealand brokers could result in a number of issues, with questions around suitability possibly becoming “a minefield”.

Ms Mason says the New Zealand regulator may have underestimated the enormity of policy volumes and the work involved for brokers in being compliant with the new rules.