Let's face it, most of us have insurance and the older you get the more you tend to have as assets build up and the Grim Reaper threatens to wield his scythe.

There are the material things like the house and the car that we feel obliged to cover as the 'what if' question plays on our conscience.

There's also the life insurance to cover the mortgage in case you cark it with payments generally going on long after you've paid the bank the last instalment of principal and long after they've extracted the last dollar of interest.


And then there's health insurance: the older you get, the more it costs you but unfortunately the longer you pay the more unlikely you are to cancel the policy because you've spent so much over the years and there's always the lingering possibility you may have to use it.

The insurance advisers, or brokers, are keen to give you advice, to tailor your needs to what they tell you are changing times. To chop and change policies, and if need be, to change companies if the price is right.

For them the price is always right as the Reserve Bank and the Financial Market Authority have found since reviewing 16 life insurance companies - finding that the customer generally comes second in the money merry go round.

The companies and their brokers are lining their pockets, commissions paid to agents for bringing in the business here is among the highest in the world.

There's little doubt the New Zealand insurance consumers have been ripped off. But this isn't new.

Last year the FMA identified what's known in the industry as "churn", where insurance advisers move clients from one insurer to another, earning commissions of up to 230 per cent of the first year's premium and other incentives, like overseas trips.

That obviously sees the hapless customer paying inflated premiums, exposing them to increased risk, where they inadvertently forget to declare something to their new insurer which means any future claim's likely to be declined.

There were plenty of examples in the latest review where the insured punter lines the peddlers of the product's pockets through the attractive incentives.


Finance Minister Grant Robertson's going to bring down the gavel on the unethical practices but not before the insurers get the chance to try and explain themselves.

Like banks in this country, which vacuumed up five billion bucks worth of profits last year, the insurance industry's about to be regulated to ensure customers rights are finally, and rightly, recognised in the way they should be.