FMA releases report into insurance sales and advice: Insurance replacement business - who benefits?

The Financial Markets Authority is calling for cooperation from the life insurance industry and financial advisers to address the potential harms to consumers from the relatively high levels of switching of existing insurance policies.

The FMA has released its first report into sales practices within the life insurance industry. The report shows that of the $1.7bn New Zealanders spent on annual life insurance premiums in the year to 30 June 2014, a significant number of existing policyholders were switched between providers. This switching activity is called ‘replacement business.’

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