{"id":274613,"date":"2026-02-09T02:12:09","date_gmt":"2026-02-09T02:12:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/274613\/"},"modified":"2026-02-09T02:12:09","modified_gmt":"2026-02-09T02:12:09","slug":"fmg-admits-misleading-insurance-charges-after-fma-investigation-pays-back-5-3m-to-customers","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/274613\/","title":{"rendered":"FMG admits misleading insurance charges after FMA investigation, pays back $5.3m to customers"},"content":{"rendered":"The insurer acknowledged that it had made misleading representations about the need to specify items and the additional cover customers would receive, breaching sections 22(d) and 22(g) of the Financial Markets Conduct Act.<\/p>\n
On top of that, between 2013 and 2024, FMG applied annual flat rate increases to certain customers\u2019 maximum insurance limits (sums insured), even where policies suggested such adjustments would be inflation-based or no longer contained an inflation clause at all.<\/p>\n
These adjustments, which were inconsistent with policy wording, resulted in a total of 54,642 customers being affected between April 1, 2014 and 2024.<\/p>\n
Approximately 26,000 customers were due a refund as a result of overcharged premiums, with a further 480 customers paid claim top-up payments.<\/p>\n
FMG made false or misleading representations in renewal statements that inflation adjustments had been applied and premiums calculated in accordance with policy terms, after claiming it had the right to charge those amounts.<\/p>\n
The insurer has since paid remediation for the issue, totalling roughly $3.38m.<\/p>\n
As well as remediating customers, FMG has agreed to pay $2.1 million in lieu of a pecuniary penalty, pursuant to an enforceable undertaking.<\/p>\n
FMA\u2019s head of enforcement, Margot Gatland, said that insurers must ensure their representations to customers are accurate, clear and consistent with policy terms.<\/p>\n
\u201cFollowing our investigation, we determined that FMG\u2019s representations to customers were false or misleading and caused customer harm.\u201d <\/p>\n
She acknowledged FMG\u2019s co-operation and its commitments outlined in the enforceable undertaking that it will strengthen systems and rewrite policy wording to prevent recurrence.<\/p>\n
\u201cThe FMA will continue to prioritise fair customer outcomes and take action where misleading conduct occurs in the financial services sector.\u201d<\/p>\n
In a statement on its website, FMG chief executive Adam Heath sincerely apologised to the insurer\u2019s clients and members for the historical issues and for the inconvenience they caused.<\/p>\n
\u201cAll affected clients have been contacted, and our refund processes will be substantively complete by the end of March 2026. Approximately $5.3m will have been paid to clients in refunds and claim top-ups once these issues are fully remediated,\u201d Heath said.<\/p>\n
Heath said FMG had strengthened its systems, processes, and controls to help prevent similar issues occurring again in future.<\/p>\n
\u201cFMG remains committed to maintaining the trust of our clients and members and we are grateful for the patience they have shown us as we worked through these issues.\u201d<\/p>\n
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.<\/p>\n
Stay ahead with the latest market moves, corporate updates, and economic insights by subscribing to our Business newsletter<\/a> \u2013 your essential weekly round-up of all the business news you need.<\/p>\n","protected":false},"excerpt":{"rendered":"The insurer acknowledged that it had made misleading representations about the need to specify items and the additional…\n","protected":false},"author":2,"featured_media":274614,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[133364,1443,16489,5811,74,1863,138,12070,1873,4381,12967,15244,142053,209,17053,12898,1446,12936,40711,111,139,69,20442,3383,112273,2742,61,12637],"class_list":["post-274613","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-53m","tag-about","tag-admits","tag-admitted","tag-after","tag-back","tag-business","tag-certain","tag-charges","tag-customers","tag-farmers","tag-fma","tag-fmg","tag-group","tag-insurance","tag-investigation","tag-making","tag-misleading","tag-mutual","tag-new-zealand","tag-newzealand","tag-nz","tag-pays","tag-products","tag-representations","tag-thousands","tag-to","tag-together"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/274613","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=274613"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/274613\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/274614"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=274613"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=274613"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=274613"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}