New Zealand’s biggest insurer cops a $19.5m penalty for misleading customers  

IAG New Zealand Ltd – the country’s largest insurer – has been hit with a $19.5 million pecuniary penalty after admitting breaches of the fair dealing provisions of the Financial Markets Conduct Act (FMC) which resulted in about 269,000 customers being overcharged by approximately $35m. 

After an investigation by the Financial Markets Authority (FMA), IAG admitted making false rand/or misleading representations about its insurance products and failing to correctly apply important discounts to its insurance products sold via its business divisions and distribution partners. 

Louise Unger, the FMA’s Executive Director, Response and Enforcement, said it was the biggest fair dealing case the FMA had taken to court and warranted a significant penalty.