Insurers won't be responsible for advisers 'at this point in time'

Government is taking a “wait and see” approach to whether it will require insurers to take responsibility for advisers dealing with their products.

The Government revealed its intention to introduce new conduct rules for banks, non-bank deposit takers (NBDTs) and insurers last week.

That includes a new conduct licensing system; a ban on soft commissions and sales-linked bonuses; and requirement for providers to meet a fair treatment standard, with policies and systems to make sure that happened. The Financial Markets Authority will be given greater powers to tell insurers and banks how to behave, and to levy fines.

As part of his cabinet paper seeking approval to introduce the new regime, Commerce Minister Kris Faafoi explained the reasoning for only requiring insurers and banks to be responsible for intermediaries who are outside a financial advice provider – such as car dealers promoting car finance, or insurance as an add-on.