|        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, July 19th, 7:20PM


Latest Headlines

FMA pings another insurer for overcharging

Court proceedings have been filed against Medical Assurance Society over fair dealing provision breaches.

Thursday, June 1st 2023, 3:29PM

The company self-reported that it had failed to apply the correct inflation adjustments on its customer policies, failed to apply multi-policy discounts and no claims bonuses, and underpaid life and disability claims to eligible clients.

The FMA alleges MAS’s failures were due to errors and deficiencies in its systems, including data entry errors by MAS employees.

The alleged breaches happened between 2014 and 2022. At least one issue dates back to 2009 but the FMA’s claim only applies to MAS’s conduct from April 2014 onwards, which is the date the FMC Act came into force.

The FMA alleges:

  • MAS applied an inflation adjustment of 3%, instead of the inflation adjustment specified in policies of customers who had elected to receive an inflation adjustment.  This issue affected approximately 6,267 customers, with approximately $1,741,631 in overcharged premiums.  MAS has reimbursed $780,501 to the affected customers. 
  • MAS did not apply the multi-policy discount or incorrectly applied a lower rate of the discount to premiums owed by some eligible customers.  This issue affected approximately 8,864 customers, with approximately $3,318,997 in overcharged premiums.  MAS has reimbursed $3,885,249 to the affected customers.
  • MAS made various errors when manually calculating a customer’s benefit payments.  These errors resulted in some customers receiving lower benefit payments than they otherwise would have if the errors had not occurred.  This issue affected approximately 104 customers, with approximately $1,047,059 in underpayments. MAS has reimbursed $1,160,638 to the affected customers.
  • MAS did not apply the correct no claims bonus grade to premiums owed by some eligible customers. This issue affected approximately 1,235 customers, with approximately $572,061 in overcharged premiums.  MAS has reimbursed $639,821 to the affected customers.

MAS self-reported the issues listed above to the FMA between 2019 and 2022, including reporting one of the issues as part of the FMA and Reserve Bank’s Conduct and Culture reviews.

The FMA acknowledges that MAS has been cooperative with the regulator through its investigation since disclosing the issues.

The FMA is seeking a declaration that MAS contravened the FMC Act and a pecuniary penalty. The proceedings were filed at the High Court in Wellington.

Tags: FMA

« [GRTV] Ballantyne on lows, highs and switching exitsNew PI insurer bundles in retroactive cover »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment



Printable version  


Email to a friend
Insurance Briefs

Why nothing else?
We wanted to dedicate this email solely to Graeme Lindsay; That's why there are no other stories.  A full newsletter will follow.

PIC Insurance Brokers partners with RE/MAX New Zealand
PIC Insurance Brokers has entered into a new strategic partnership with real estate company RE/MAX New Zealand as the exclusive insurance broker.

New customers get 3-months' premium-free on Fidelity Life
Fidelity Life has announced a special offer to cover new customers’ premiums for the first 3-months of their policies.

Premium relief for customers in drought areas
Fidelity Life offers premium relief to drought-affected customers

News Bites
Latest Comments
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

Previous News
Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
Site by Web Developer and