Term life commissions undisclosed
The Investment Savings and Insurance Association (ISI) is currently seeking a legal opinion on the new disclosure regulations because of what appears an anomaly in the rules issued by the government last week.
Friday, December 14th 2007, 6:41AM
by Rob Hosking
ISI chief executive Vance Arkinstall says the association has checked with officials and the regulation is not a drafting error.
"We had the expectation that disclosure of term life insurance commissions would not have to happen, but it appears From what is currently written, that exemption only exists when term life is the only issue being discussed at the meeting.
"That is going to lead to very strange outcomes, if it means what it appears to mean. It might encourage advisers to have meetings where they talk about term life insurance, and then they close that meeting and start another one where they talk about investment products.
"That would clearly not be the intention of the rules, but that's the sort of perverse outcome which would result.
"As an industry, we don't want to get involved with odd ways of behaving. We would like to have this clarified."
The association plans to discuss the issue further with Minister of Commerce Lianne Dalziel and officials.
There are also issues concerning what is to be disclosed: the content of any disclosure is not clear in the regulations, Arkinstall says.
He also this has to be clarified before the rules come into effect February 29, next year.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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