Clark DavidHon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I did forensically listen to the member Andrew Bayly's contribution and I identified a question in there which I'm going to address and that was really where does this bill sit in the landscape of regulation. As I said—and so I'll repeat it for the member because he may have missed it in my initial contribution—by introducing a conduct-licensing regime for financial institutions such as banks insurers and non-bank deposit takers we are ensuring that we treat customers fairly. This bill is the final piece of the Government's response to misconduct issues in the banking and insurance sector. So effectively this piece of legislation sits across the top—an umbrella-type regime if you like—across things like the Financial Services Legislation Amendment Act the Credit Contracts and Consumer Finance Act the Fair Trading Act and the Consumer Guarantees Act those pieces of legislation that are responsible for specific parts or regulating particular products or services. This is the regime that sits across the top and ensures that there are principles and if there is compliance with those other regimes that can be brought as evidence of compliance with this regime so there is not the duplication. If I go to the member's other question where he suggested that perhaps there was—because there was a second question buried in there. It was buried as a statement. He asserted that this was a piece of legislation in search of a problem and I want to just challenge that because this legislation and those other bits that address particular products and services came about after a series of reviews including in 2018 one by the Financial Markets Authority and one by the Reserve Bank of New Zealand. Through those reviews they identified actual evidence of misconduct and harms identified through the reviews and I'll list a few for the committee: there was a bank that charged customers for credit card repayment insurance for which the customer received no benefits in return for example due to customers being ineligible for the product at the point they were sold it or because they were sold and charged for multiple identical policies when they would only ever be able to claim for one. The second example: a bank continued to charge deceased clients premiums for credit card repayment insurance and life insurance. Another: an insurer continued charging customers for payment protection insurance after loans had been fully repaid and therefore the product provided no benefit for the customers. Another example: poor administration of products leading to overcharging—e.g. increased premiums to account for inflation but at a rate higher than inflation as evidenced in the Consumers Price Index. And another: instances of consumers paying premiums over a long period of time for insurance they did not know they had. Now what those reviews identified in all of those instances of behaviour was negligence effectively: a culture in banks and life insurers where those institutions lacked a focus on customer outcomes and had serious weaknesses in their internal systems and controls—and that's the findings of those reviews. That creates real risk of widespread harm for consumers if left unchecked. So what we're doing here is making sure that those harms are not presented to consumers. If the member simply doesn't care and thinks it's fine for people to charge for life insurance when they're dead—if he thinks that's OK he's definitely on a different side of this argument. But I would think he would want to see consumers protected. He would want to see banks and insurers acting in the interests of their customers and that is what this legislation is designed to do. I could give examples and I may do if the member wants more from the Australian royal commission which found even more egregious examples. They had a royal commission which dug even deeper into the parents of the same banks and found some quite horrific examples of banking and insurance practice. That's the genesis of this piece of legislation. Those very specific pieces of legislation that deal with particular products or services the member mentions are a part of that picture. But the Financial Markets (Conduct of Institutions) Amendment Bill we're debating here today sits over the top of those other bills and makes sure that we have the right principles across them and that everything is joined up and compliance with those other bills can be used as evidence of compliance with this legislation. It's intended to avoid duplication. Thank you Mr Chair.