The New Zealand government has agreed to fast track the tightening of financial regulation to force life insurers and banks to improve their management of culture and conduct risk, and the new legislation is likely to include a management accountability regime similar to Australia's BEAR. The announcement came immediately after the release of a joint report from the two current regulators, the Reserve Bank of NZ and the Financial Markets Authority, into the life insurance sector.Finance Minister Grant Robertson said the report highlighted similar issues to those revealed in last year's banking industry report, including complacency and prioritising sales over long-term customer interests, and that was what convinced the government it had to act quickly.This report was even more damning, finding "extensive weaknesses in life insurers' systems and controls, with weak governance and management of conduct risks across the sector and a lack of focus on good customer outcomes".The regulators found limited evidence of products being designed and sold with good customer outcomes in mind, sales incentives structures that risked sales being prioritised over good customer outcomes and a serious lack of insurer oversight and responsibility for the sales and advice where sales were through an intermediary. "Remediation of conduct issues is generally very poor, with insurers slow to respond to issues and in some cases not sufficiently remediating them", they said.The FMA and RBNZ used the release of the insurance industry report to repeat their calls for more powers and funding, and the government was ready with a plan to fast track customer protection measures in the financial sector."It is an ambitious timeframe but my intent is to have both pieces of legislation in Parliament by mid-2020, because it is time to ensure consumers get protection that is clearly needed," Commerce and Consumer Affairs Minister Kris Faafoi said.Robertson said it was a sector that had been under-regulated for far too long, and needed an "appropriately resourced regulator". Asked by Banking Day if this could be a new regulator (along the lines of APRA in Australia) to take over the responsibilities of the RBNZ and FMA, or possibly a merged entity, Robertson said the government was open to those possibilities, but no decisions would be made until after consultation.Earlier FMA chief executive Rob Everett told a media conference that, unlike in other jurisdictions, in New Zealand there are relatively few specific requirements around financial services conduct. He repeated the call for more teeth for the regulators. "The point we are making to the government is that in most modern supervisory regimes the regulators have to be able to go in and monitor and check even in the absence of a potential piece of wrongdoing or misconduct, and that just doesn't exist here. "We have been suggesting specific legal obligations about conduct and customer outcomes, and secondly you need the ability and the authority to demand information and go in and insist on having meetings and review documents and look at processes to enable you as a regulator to judge whether