January 30, 2019

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FSF says all financial services providers should consider implications of insurance review

The Financial Markets Authority and Reserve Bank's most recent review may focus on life insurance, but all sectors of the financial services industry should take this opportunity to ensure a customer-first culture, says Financial Services Federation (FSF) Chief Executive Lyn McMorran.

"The Financial Services Federation does not represent life insurers but does have credit-related insurance providers as members. The findings of the review should be considered by them and indeed the wider professional and financial services sector to ensure they have a focus on good outcomes for consumers," McMorran says.

"All FSF's credit-related insurance members adhere to the Responsible Credit-Related Insurance Code which they helped to develop in 2017 to communicate the benefits of such products to consumers when they are provided responsibly and exactly what this looks like.

"Credit-related insurance provides valuable consumer protection when credit is being obtained if the consumer suffers an unforeseen event that would make it difficult for them to repay their debt or maintain the asset for which the debt was obtained. Therefore the FSF believes that the responsible provision of credit-related insurance is an essential part of responsible lending."

The FSF supports Ministers Faafoi and Robertson in their efforts to introduce legislation that will better protect customers in the life insurance area, but as with any legislative change it will only be effective if it is sufficiently enforced and those who flout the law are targeted and prosecuted.

Find out more about the Financial Services Federation's Responsible Credit-Related Insurance Code and download a copy here.

The Financial Services Federation (FSF) is an industry organisation representing responsible, non-bank financial institutions. Its members include the likes of Latitude Financial, Avanti Finance, and several motor vehicle finance arms such as Toyota Financial services and BMW Financial Services. FSF has strict joining process and takes a quality over quantity approach to its membership to ensure its integrity. The Federation currently has 57 company members, all of which are subject to the FSF Code of Conduct which ensures its reputation as the setter of industry standards in responsible lending. FSF members take their compliance obligations seriously, and support quality

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