This report summarises findings from an evaluation of New Zealand fire and general insurers’ responses to the Life Insurer Conduct and Culture review undertaken by the Financial Markets Authority and the Reserve Bank of New Zealand in 2019.

It is important that insurers consider how they comply with FMA expectations for good conduct and culture as they prepare for the introduction of the new conduct licensing regime set out in the Financial Markets (Conduct of Institutions) Amendment Bill.

Only two insurers out of 42 met the FMA’s expectations in full.

Overall, the responses to the regulator showed there is a poor understanding of and commitment to good conduct and culture practice across the sector, and that the majority of these insurers are not yet prepared for the new CoFI regime. In particular, the review found:

  • The level of conduct maturity was low, with some insurers demonstrating that they did not see conduct and culture as relevant to their organisation.
  • Product and policy-holder review processes need to be improved.
  • Insurers need to have a clearer line of sight on commissions paid to intermediaries, including whether they are fair and reasonable to customers, and understood by customers.
  • Insurers should have greater oversight of how intermediaries are selling and managing the insurers’ products.
  • Many boards are yet to support the development of an organisational culture that promotes good conduct, rebalance shareholder and customer interests, and set an appropriate conduct risk appetite.
  • Not enough has been done to ensure remediation activity is completed promptly and addresses the root cause of issues.


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