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OnePath and Cigna pinged by FMA

OnePath Life (NZ) and Cigna Life Insurance have agreed to pay the Financial Markets Authority $180,000 after admitting breaches of the fair dealing provisions of the Financial Markets Conduct Act 2013 (FMCA).

Wednesday, June 15th 2022, 9:49AM

by Jenni McManus

The breaches relate to misleading claims made by the ANZ bank from 2014 to 2018 when issuing credit card statements to a group of customers who had credit card replacement insurance (CCRI) policies with Cigna and OnePath.

Last year ANZ was fined $280,000 in the High Court after admitting two civil causes of action brought by the FMA: that it had issued duplicate CCRI policies and charged extra premiums to some customers, claiming they would receive extra benefits when that wasn’t the case; and that ANZ had issued, and failed to cancel, CCRI policies to customers who were ineligible because of their age.  All up, 307 customers were affected.

Although it became aware of the problems in late 2017/early 2018, ANZ failed to disclose the matter to the FMA and Reserve Bank when the regulators were doing a culture and conduct review of retail banks in May/June 2018. ANZ did not notify the FMA until June 2019.

OnePath and Cigna were the insurers of many of the CCRI policies and both notified the FMA during its life insurance and culture and conduct review.

Although neither insurer directly made misleading representations to its customers, they admitted liability for the misleading claims made by ANZ as their agent. Section 536 of the FMCA deems a product and services provider to be liable for the conduct of their agents under some circumstances.

OnePath and Cigna have jointly offered an enforceable undertaking to the FMA which involves paying $180,000 in lieu of a pecuniary penalty. Cigna says it is committed to “developing and maintaining effective policies, systems and processes to support good customer outcomes and to prevent issues of the kind referred to in these undertakings from occurring in the future”.

OnePath, which along with Cigna Life is owned by Cigna NZ Holdings Ltd, is no longer a licensed insurer so did not offer a similar commitment.

Liam Mason, FMA general counsel, said: “This enforceable undertaking sends a message to the industry that product providers, underwriters, distributors and intermediaries have shared responsibility for ensuring customers are treated fairly and receive good outcomes for the products and services they receive.

“OnePath and Cigna received regular information from ANZ about the affected policies and should have had systems and controls to identify the issues and take steps to ensure their distributor was delivering their policies correctly.”

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OnePath and Cigna pinged by FMA
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