The Insurance Council of New Zealand (ICNZ) has launched its revised Fair Insurance Code which encourages good conduct and professionalism in the insurance industry and describes how the relationship between insurers and their customers should work.
The Minister of Commerce and Consumer Affairs, Kris Faafoi, says: “This sort of move is in line with the Government’s work to improve the culture and conduct in the financial sector and I am pleased to see the ICNZ showing leadership.”
Developed by the Insurance Council of New Zealand, the Fair Insurance Code (Code) sets out the standard of service its members must provide to their customers.
Tim Grafton, CEO Insurance Council of New Zealand, says: “Good conduct ensures customers are treated fairly – which in turn helps to promote trust and confidence in the sector.
“We know there is work to be done to achieve this, and the code is a critical step. However, our annual research tells us that only one in four people are aware of the code. To address this issue, we have mandated the inclusion and promotion of the logo on all member websites, claim and complaints materials.
“We are engaging with community organisations though our financial literacy programme who work with vulnerable customers to ensure they are aware of their rights.”
Grafton says the code plays a critical role in the sector’s self-regulation and complements the work undertaken by industry’s regulators the Financial Markets Authority and Reserve Bank of New Zealand.
We are engaging with community organisations though our financial literacy programme…
Complaints processed through internal dispute resolution schemes in 2019 almost doubled year on year to 6,592 cases.
“Positively these were remedied for customers, with complaints referred to an external dispute resolution scheme remaining relatively flat,” says Grafton.
The review of the Code incorporates input from industry, consumer groups and the general public and is undertaken every three years to ensure it encapsulates the highest standards of conduct. It also incorporates aspects of the FMA’s ‘Good Conduct Guide’.
“The code ensures everyone understands insurers responsibilities. Key points, like the commitment to act transparently, with integrity and in utmost good faith, have been made even clearer. And responsibilities have been extended to include an expectation that insurers will also develop, market and sell their products responsibly.
The code will be effective from 1 April 2020. To find out more here.
About the code
- The Fair Insurance Code is monitored with quarterly and annual reports from members and dispute resolution schemes, the Insurance and Financial Services Ombudsman (IFSO) and Financial Services Complaints Ltd (FSCL). Together they report on unresolved significant breaches and complaints data. From April 2021 this will also include an annual attestation as to overall compliance to all provisions of the code
- The Fair Insurance Code is monitored by ICNZ’s Code of Compliance Committee, consisting of three independent legal experts Sir David Carruthers, David McGee QC and David Caygill
- The committee has a key role in reviewing the data provided by members, including reporting obligations to the ICNZ Board through its CEO
- The committee can query individual member reports, and has the authority to investigate significant unresolved breaches in turn making recommendations on what should be done to resolve them
- The committee may sanction members if necessary. These are the same as those under the ICNZ member rules – including membership termination, imposing a fine of up to $100,000, reprimanding a member or forcing them to publicly acknowledge the breach. These measures are upheld and implement by the ICNZ board