The FMA says customer remediation by banks and life insurers following the Conduct and Culture reviews has so far seen customers paid $150 million.
The reviews of banks and life insurers, where financial institutions were asked to report any issues requiring remediation, were started by the RBNZ and FMA between 2018 and 2019.
Clare Bolingford, FMA Director Banking and Insurance, said: “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 225 such issues resulting from what it termed “creaking systems and weak controls”, that saw more than $43 million paid in remediation to life insurance customers.
“These figures represent just one-third of issues whose impacts have been fully assessed to date,” says Bolingford.
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,” says Bolingford.
“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.”
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.
See our report: ‘Creaking Systems’ Behind Hundreds of Life Insurance Issues