New Zealand's life insurers will stop sending high-selling financial advisers on overseas trips by 2020.
According to the New Zealand Herald, its inquiries have found all of the major life insurers will stop offering trips by 2020 but next year advisers will still have the chance to be taken to Japan for the Rugby World Cup, Cambodia and Vietnam, Switzerland or Hong Kong.
The Financial Markets Authority (FMA) in May called for insurers to act after a report on soft incentives in the sector found nine firms spent NZ$18m ($12m) in two years taking advisers to destinations including Tahiti, Argentina and the US. The FMA was concerned the incentives were setting advisers up to provide poor advice to the public.
Sovereign, New Zealand's biggest life insurer, which was bought out by global player AIA this year, said it would cease overseas recognition trips for advisers beyond 2019. Chief executive Nick Stanhope said the decision formed part of a wider review by AIA/ Sovereign.
He said, "Our aim is to ensure our relationship and responsibilities with advisers remain closely aligned to supporting best practice and promoting good outcomes for customers."
Partners Life, which hit the headlines in 2014 when it offered insurance advisers a luxury trip to Los Angeles, which included a dinner party at the Playboy Mansion, said an adviser conference scheduled for next July in Cambodia and Vietnam would be its last offshore conference
The company believes "offshore conferences lead directly to good customer outcomes because of the emphasis on adviser training, upskilling and business management", but it was ready to adapt "to meet a wider market view".
Fidelity Life, whose shareholders include the NZ Superannuation Fund, said it had no plans for its partnership programme beyond 2019. Chief executive Nadine Tereora said, "The insurance industry's undergoing fundamental change and we're mindful of evolving public expectations."
A spokesman said Fidelity's last trip would be to Switzerland, partnering with its reinsurer Swiss Re.