CONSUMER REACTION: We told you so

Major problems in the life industry insurance are leading to consumers being sold poor-value products and paying higher premiums.

Consumer NZ chief executive Sue Chetwin said the Financial Markets Authority (FMA) and Reserve Bank review of the industry has found “extensive weaknesses” in the life insurers’ systems and a lack of focus on good customer outcomes.

Chetwin said the review confirms problems in the industry that Consumer NZ’s own research has highlighted, including the major risk that commission-based selling has for consumers.

“Sales incentives increase the risk consumers will be sold a product simply because the sales rep will earn another commission. There may be no benefit to the consumer at all,” she said.