Is it time to ban commission for brokers?
The government in New Zealand is considering banning commission being paid to insurance brokers. A public consultation is underway as the country’s administration consider making changes to its financial services laws. While reputable brokers will always put clients’ needs above commission the government is concerned about those that don’t. With many brokers partly or entirely paid through commission from product providers the government’s consultation paper states: “These commissions can create a conflict of interest for the adviser; incentivising them to advise that their client buys a particular product.” It asks whether commissions should be restricted or banned altogether.
Some types of New Zealand financial advisors are legally required to make full disclosure about commission payments however most of the country’s insurance brokers are not. While disclosure is the way the issue of commission is handled in many countries others, like the UK, have banned commission.
Study warns of impact of Republicans plans on insurance industry
In the month when a ruling is expected in the US Supreme Court in the King v Burwell case on federal subsidies for Obamacare a study has warned of the negative impact of two Republican plans. The plans that have been drawn up by the party would be their response to the court ruling in favor of the plaintiffs and include agreeing to subsidies continuing until 2017 if individual and employer mandates are scrapped.
However the study by the American Academy of Actuaries says that removing the mandates would have a large negative impact on the insurance industry. It concludes that if individuals were not required to have insurance plans many younger, healthier Americans would decide not to, leaving the insurers with a pool of older and less healthy policyholders. That would increase premiums in future years but this year, with rates already set, it could be highly damaging. A second proposal by the Republicans would involve looking at an alternative to Obamacare altogether. The AAA study says this would simply delay the impact on the insurance sector.
Humana considers sale
Health insurance company Humana is considering a sale and has appointed Goldman Sachs as advisors. The Wall Street Journal reports that a source close to the matter says that Humana has already had talks with Aetna and Cigna. Aetna and Anthem have recently stated that they are interested in doing some big deals with consolidation hotly anticipated in the sector.
Insurance workers prepare for exclusive cancer relay event
Women in Insurance Cancer Crusade are gearing up for the annual season of Relay for Life events with an insurance-industry exclusive race in Ontario this month. The event at Garrison Commons at Fork York will take place on June 12 and supports the national events organised by the Canadian Cancer Society. WICC has supported Relay for Life for the last six years and continues to be a very significant corporate contributor through sponsorship and fundraising. Since its inception, WICC has raised over $11.2 million to support cancer research. "It's still not too late to join this year's industry-exclusive event," said Susan Drodge of the Canadian Cancer Society in Ontario, "Join online or donate to the cause. Money raised funds hundreds of Canada's best and brightest researchers who are working tirelessly towards the next cancer breakthrough to save lives."
