Our Commitment to Acting as a Responsible Lender

What is the CCCFA

The CCCFA (Credit Contracts and Consumer Finance Act 2003) requires consumer lenders, including Resolution Life, to take steps to ensure that they are lending responsibly to protect borrowers from unaffordable debt.

Over the last two years, the New Zealand Government has been making a number of changes to the CCCFA.

Who does this impact?

These changes impact only our conventional Whole of Life and Endowment products which allow our customers to take out Loans on Policy or incur Premium Arrears debt (subject to interest)[1]. The terms and conditions of the policies remain unchanged.

Key information about the CCCFA

Resolution Life, as a responsible lender, must make reasonable enquires to satisfy ourselves that our customers will be able to repay any new Loans on Policy without suffering substantial financial hardship. This will include in most cases obtaining detailed information from borrowers regarding their income, expenses, and the purpose of the loan before lending them any money or extending further credit under an existing loan.  

In addition, the CCCFA also requires Resolution Life to:

• Provide initial disclosure of key information about the terms and conditions of the loan as well as debtors rights to ensure customers are making informed decisions.
• Provide ongoing and variation disclosure to ensure customers keep track of their debts throughout the life of the loan.
• Comply with ‘Lender Responsibility Principles’.
• Update our customers promptly of any changes to interest rates applicable.
• Advertise our credit facilities and applicable interest rates in accordance with the CCCFA.
• Ensure loan policy terms are expressed in plain language and are clear and concise.
• Comply with any debtor’s request for information within 15 working days.
• Reasonably consider unforeseen financial hardship applications to alter previously agreed Loans on Policy repayment plans.
• Not charge unreasonable credit or default fees.
• Accept full or partial prepayment of any debt.

What changes has Resolution Life already made?

• Initial Disclosure letters were sent to all conventional product customers from mid-September 2021 clarifying the terms and conditions of the credit facilities available to them under their policies.
• Loan and Premium Arrears statements are sent to all affected customers at least every 45 working days. These statements have been updated to ensure that they comply with the CCCFA’s prescriptive ongoing disclosure requirements.
• Loans on Policy Application Forms have been updated to ensure we continue to meet our obligations under the CCCFA.
  • Updated disclosure documents so that they are clear and concise and written in plain English.

Updated Loans on Policy Application Forms

Resolution Life has recently updated its Loans on Policy Application Forms to ensure that we are complying with our ‘Responsible Lender’ obligations under the CCCFA. As noted above, Resolution Life must conduct an affordability assessment as part of our obligations as a responsible lender.

Accordingly, the application form requests customers to confirm the purpose of the loan and whether they intend to either: (i) make regular repayments on the loan; or (ii) utilise the surrender value of the policy.

Should a customer indicate an intention to make regular repayments in order to preserve the value of the policy, they must then provide further information regarding their expected income and expenses over the next 12 months. 

This information will enable Resolution Life to determine whether the customer will be able to repay the loan without suffering substantial hardship. It is not requested for the purpose of providing financial advice.

How you can assist us

You can request a copy of the new Loan on Policy Application Form by either emailing us askus@resolutionlife.co.nz or by calling us on 0800 808 267. We would appreciate your assistance in helping our customers complete the application form and make an informed decision about whether to enter into the loan. We recommend all our customers obtain independent advice from their financial adviser before applying for a loan. 

Going forwards, Resolution Life will provide regular Loan and Premium Arrears statements to our customers so that they can monitor their debt. In addition, our customers can request information about their loan, any debt on the policy, applicable interest, etc. at any time in writing.

Please do not hesitate to get in touch should you have any questions. We are here to help.

^{[1] The current interest rate is 4.5% per annum. The interest rate is set by Resolution Life at its discretion and is subject to change. More information, including how interest is calculated and charged, is set out in the policy documents.}