Orr says life insurance companies are good businesses, but there needs to be a lot of change in how they are run.
The Reserve Bank and Financial Markets Authority has done Culture and Conduct reports on both banks and life companies and found that the latter was in worse shape than banks.
Orr says the regulators want to see change and their preference is that the change comes from the companies rather than from the regulators. Boards and senior management need to show "self-discipline", he says.
They need to show a "culture that is necessary to take someone's money and put it into long tail agreements which are very complex."
He says the regulators want to "try and drive the snake oil out of it and make sure what you see is there."
Orr says culture and conduct isn't a new fad, but it is a why of demonstrating a product delivers what is written on the packet.
While it found not too many issues in the banking sector "whole concepts of measuring appropriate conduct was absent" in the life insurance market.
He said a big part of the challenge third party distribution. In the regulators' view advisers were being incentivised on volume and churn not customer outcomes.
TO HEAR THE FULL INTERVIEW - Listen to the Podcast here
Full transcript of the interview available here.
