New Zealand's Financial Markets Authority: $150 Million Returned To Customers Following Conduct And Culture Reviews Of Banks And Insurers

AUCKLAND, New Zealand, Oct. 6 -- New Zealand's Financial Markets Authority issued the following news release:

The Financial Markets Authority (FMA) - Te Mana Tatai Hokohoko today said customer remediation by banks and life insurers following the Conduct and Culture reviews was progressing well, with the total dollar value returned to customers now reaching $150 million.

The joint reviews of banks and life insurers were commenced by the Reserve Bank of New Zealand and FMA between 2018 and 2019. Financial institutions were asked to report on any issues requiring remediation, and this update reflects the continuing efforts to review their practices and systems.

Clare Bolingford, FMA Director Banking and Insurance, said "the remediation work shows the extent of weaknesses in the systems and processes across banks and life insurers. This demonstrates the significant amount of work required by financial institutions to ensure they are identifying, rectifying, and remediating issues which, to date, have impacted over 1.5 million customers with a total sum of $150 million returned so far."

Last month the FMA revealed, for the life insurance sector, 225 such issues resulting from creaking systems and weak controls, showing nearly half a million customers impacted, and more than $43 million paid in remediation. These figures represent just the one-third of issues whose impacts have been fully assessed to date.

Now, the picture for efforts across the banking sector includes:

* 266 separate issues being remediated

* 952,000 bank customers impacted

* $109 million returned to bank customers.

"We acknowledge the substantial work by banks and insurers to date to fix their customer issues - especially those firms tracing back further than they had to. We note that over the past 12 months boards have displayed a greater understanding of what needs to occur to achieve consistent fair customer treatment. It is likely there's more self-reporting to come as firms continue these efforts. The more firms have looked, the more problems they've found. You can reasonably expect our future monitoring activities to consider how well firms have completed, and reported on, these matters," Ms Bolingford said.

"This work has also helped the FMA deepen its understanding of the bank and insurance sectors, and has enabled improved engagement with the industry, in seeking to root out conduct problems and prioritise the interests of customers. Our ongoing engagement over this period will support the implementation of the new Conduct of Financial Institutions Regime in shaping conduct principles and practices, and preparing for licensing from next year. Firms will be in a better position to demonstrate how they are treating customers fairly through their fair conduct programmes."

Before COFI licensing commences in June 2023, the FMA will provide guidance on licensing standard conditions, an application guide and an information sheet on the fair conduct programme.

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Original text here: https://www.fma.govt.nz/news/all-releases/media-releases/150-million-returned-to-customers/