Good conduct = good business.

Good conduct = good business.

What is good conduct?

Good conduct involves putting the customer’s interests first, ensuring their needs are met with suitable products and services which they understand. It means that across an organisation, from the leadership down, there’s a common understanding of desired business outcomes and how they align with customer objectives and outcomes.  

Conduct and culture of life insurers.

The findings of the joint FMA and RBNZ conduct and culture review of NZ life insurers supports the view that life insurers have responsibilities for good conduct throughout the insurance lifecycle. Where there’s more than one party involved in the distribution of products, good conduct in relation to distribution is a shared responsibility.

The 2019 FMA/RBNZ report included the following expectations of life insurers to:

  • have greater oversight of how all distribution partners/suppliers are managing and selling their products;
  • have policies and processes for managing misconduct by distribution partners/suppliers;
  • provide training and accreditation on their products.

The FMA’s Guide to Good Conduct also provides principles-based guidance on how the FMA views conduct and sets out what licensed financial service providers should demonstrate to customers, focusing on communication, controls, culture, capability, accountability and conflicts.

Conduct and culture review

Conduct Bill.

The Financial Markets (Conduct of Institutions) Amendment Bill - known as the COFI Bill - also talks to adviser supervision requirements for financial institutions (including life insurers). The Bill (which is yet to be passed into law and as such, could be subject to further change), requires financial institutions to ensure that distribution partners/suppliers support their compliance, including:

  • product and other training,
  • conduct expectations,
  • dealing with misconduct, and
  • monitoring consumer outcomes.

What does this mean for advisers and adviser businesses?

We’re strong supporters of good conduct because it’s the right thing to do. It helps build trust in our industry and the advisers we work with and contributes to closing New Zealand’s under-insurance gap.

At Fidelity Life we support a focus on good conduct, so we’ve introduced a product accreditation programme for advisers, set conduct expectations of our advisers, and soon we’ll be announcing our adviser quality assurance programme.

More info.

  • Visit our Building Better Business page on conduct here. If you can’t access – speak with your BM or BAM.
  • You can also read our earlier update about the COFI Bill in our newsletter: Checkpoint Issue 9.