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The sector Life insurance has taken risks with its insureds The survey of insurance sales in banks and other insurers like AA Life and Cigna has shown that the "insurance" is not the same. Life insurance industry has placed the interests of customers in second position. The FMA said less than half of the 11 banks and insurers surveyed even informed clients of the risks of abandoning their clients. Old life insurance policies in favor of new life insurance policies.
"The FMA considers that the replacement of insurance policies is a high-risk transaction for clients, because of the risk of declining receivables in the future and the original policy benefits being lost. Customers may never discover this, until they are trying to claim insurance, "said Liam Mason, the director of FMA regulation.
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PROVIDED
Liam Mason of the Autorité des marchés financiers would not appoint the three banks and / or insurers in his
When? a client changes the font, he risks getting less coverage because new policies have waiting periods, pre-existing conditions are covered, and some benefits may not be included in new policies. insura Large corporations, with more than $ 2.2 billion spent each year on life insurance policies, provide financial incentives to businesses such as banks to have their clients purchase life insurance.
Blair Vernon, general manager of AMP, the insurance sales practices often saying that customers of AMP rivals did not get told to massive commissions that the advisor, or salesperson of 39, insurance, would be paid to pass their policies from one insurer to another, or the benefits of the soft "
" I've seen some replacement companies on a piece of paper from one company. page. "Of the 11 entities reviewed, less than half advise their clients that replacing their life insurance could result in worse coverage or potential loss of benefits. This means that consumers do not receive sufficient information to make an informed decision about the benefits and risks of the advice offered. "
" We are concerned that a number of companies do not recognize or treat customer risks in alternative insurance operations. Processes seem to be put in place to manage the risks incurred by companies, not to help customers. "
Only two (of which Vernon says AMP included) banks and insurers surveyed had systems designed with better results for clients, the FMA concluded.
Vernon said," Some seem to have spent their time to design frameworks to limit their responsibilities, rather than focusing on what is good for the customer. "
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People who sell it Life insurance are often unaware that the advisor may try to qualify for "soft dollar" commissions, including trips to exotic destinations like Las Vegas. [19659006] Publication of the report comes less than two months after that FMA has stated to have seen no evidence that an Australian style banking commission was needed here in New Zealand.
Sales of bank and insurance personnel spawn Read in addition to concerns the incentives were pushing staff to act in an unethical manner to make sales, which Mason seemed to recognize in insurance sales.
"Without proper procedures … advisors and middlemen are set up to not meet their obligations"
It's a massive sales force with some 21,000 "advisers "Working for banks and other insurers.
The question had been recognized for years, but the damage was hidden except in high prices.
Often, people who ended up with worse coverage , never ended up making a claim, and if they did, their case never made headlines.
"You would not know it until five, ten, fifteen years ago. That's the nature of this industry, "said Vernon.
" You would not know it until you claimed it. It's also an insidious one.
This is also the forgotten scandal of the world of financial services.
SUPPLIED
Blair Vernon, CEO of AMP, called for a clean-up of the business of replacement of life insurance.
Vernon said the AMP had raised concerns with the FMA three or four years ago, but concerns have been raised for more than a decade. 19659007] An article in the newspaper Stuff Sunday Star-Times in 2005 said: "One in ten dollars that consumers pay in personal insurance premiums is wasted because of the unnecessary policy of brokers . Churn is the dirty secret of the world of insurance. This stems from the fact that insurance brokers pocket commissions of up to 150% of first year premiums each time they switch from one policy to another to a policy. "
" Everything is resolved, if Vernon says:
The change is underway: not only are banks gradually selling their life insurance subsidies, ASB having sold Sovereign to AIA, and ANZ having sold OnePath Life. in Cigna, but the bill to amend the financial services legislation is currently going through Parliament and will include the obligation to "give priority to the interests of the client".
Mason says that the report left no doubt to banks and insurers the costs, benefits and risks when they are encouraged to change life insurance from one provider to another
WHO COVERED THE REPORT OF THE FMA
* AMP
* ANZ
* Asteron Life
] * Bank of New Zealand
* Cigna Life
* Mutual Group of Farmers
* Medical Insurance Company
* Partners Life
* Sovereign
* AA Life
* Westpac
– Tricks
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Tags attitude Benefits exposed FMA insurers life People report
