News Round Up

Tax incentives for health insurance, ASX considers listing funds, S&P gives its view on NZ and ASG signs up ANZ

Sunday, March 25th 2001, 10:42PM

The health insurance sector is putting out a report later this week that is likely to favour tax incentives for premiums.

The report, written by NZ Institute of Economic Research for the Health Funds Association, is understood to argue that New Zealand should adopt an approach similar to that used in Australia.

While such a move would be positive for the health insurance industry, there are fears that some players will exit the market following a High Court decision last week that allows Southern Cross to retain ownership of all Aetna's policies.

ASX considers listing managed funds

The Australian Stock Exchange (ASX) is considering listing all mainstream managed funds on its exchange.
The aim of the proposal is to make transactions of managed funds more accessible, reduce management expense ratios (MER) and to make the use of a broker in some form mandatory.
A spokesman for the exchange says the idea is still in its early stages. However, the ASX has had discussions with fund managers and financial planners.

Planners are likely to suffer if this scenario eventuates as they will be pitted directly against sharebrokers, and they would lose potential revenue from the buy/sell spread and changes to trail commissions.

S&P says things OK
The New Zealand financial services sector is "generally sound" despite increasingly challenging operating conditions, ratings agency Standard and Poors says.

"Current indications are that the outlook for the banking and non-life insurance industries are slightly better than for the life insurance industry," S&P finance director Gavin Gunning says.

He says the balance sheet strength of companies in the life insurance sector is decreasing as more emphasis is placed on shareholder returns.

"The outlook for the industry is pressured by low growth opportunities, an unsupportive tax regime, reducing operating margins, and pressure for balance sheet efficiency," he says.

ASG takes on ANZ
The ASG Scholarships Group has appointed ANZ Banking Group (New Zealand) Limited to be a second investment fund manager for the pooled funds of its New Zealand members.

ANZ joins WestpacTrust as a fund manager for ASG in New Zealand.

ASG – the Australian Scholarships Group Friendly Society Limited established separate funds for New Zealand members in 1995. Four years earlier, ASG became the first friendly society to issue a prospectus for its scholarship programmes for New Zealanders.

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