FMA gets its wish: Insurance sales incentives to be banned

In a release, Commerce and Consumer Affairs Minister Kris Faafoi said the Government would fast-track consumer protection measures in the financial sector.

It follows the Reserve Bank and Financial Markets Authority report into life insurance conduct and culture.

”There are gaps in the regulation of the sector that are exposing consumers and we are going to address them.  We need a regime where banks and insurers are focused on good outcomes for the consumer and are not conflicted by sales rewards," Faafoi said.

“The report has found New Zealand life insurance industry has a culture that prioritises sales over customer interests and customers deserve better. Cabinet today agreed we are going to get rid of sales incentives in the insurance industry that are driving behaviour that is not in the best interest of consumers.