It has today released its report into replacement business in the life insurance industry.

Looking at data from the country’s main insurers, it identified that 200 of the 1100 advisers with more than 100 active life policies on their books met the FMA’s criteria for a high estimated rate of replacement business.

That criteria was that at least 12% of an adviser’s policies lapsed and the adviser wrote at least 12% of policies as new business within one year, to least 40 lapsed in a month and the adviser wrote 40 new policies in the same month.

FMA director of regulation Liam Mason said the regulator had not made contact with any adviser that it had identified as potentially replacing worryingly large amounts of business.

But he said what the FMA had uncovered – and the potential links to upfront commissions, soft incentives such as trips and clawback periods – would guide its further information gathering and analysis work.

The FMA said it would visit advisers with high rates of replacement business to review their practices and examine whether churn was occurring.

“If we believe a financial adviser has breached their statutory duties of due care, skill, and diligence, we can take action under the Financial Advisers Act. If we believe an AFA has breached the code of professional conduct, we can refer the case to the Financial Advisers Disciplinary Committee.”

It will also give more guidance for financial advisers to help them understand how to ensure they were putting clients at the heart of what they did.

It has also developed resources for consumers to help them back better-informed decisions about life insurance.

The FMA has given its findings to the Ministry of Business, Innovation and Employment to help inform the review of the Financial Advisers Act.

The FMA could not give a timeline for its investigation of replacement business but said the work would be done in tandem with its focus on licensing entities under the Financial Markets Conduct Act.