{"id":61745,"date":"2025-10-06T06:40:08","date_gmt":"2025-10-06T06:40:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/61745\/"},"modified":"2025-10-06T06:40:08","modified_gmt":"2025-10-06T06:40:08","slug":"new-zealands-largest-insurer-iag-to-pay-19-5m-for-widespread-failures","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/61745\/","title":{"rendered":"New Zealand\u2019s largest insurer IAG to pay $19.5m for widespread failures"},"content":{"rendered":"
FMA executive director of response and enforcement Louise Unger said the nature and scale of IAG\u2019s contraventions were greater than those present in any other fair dealing case the FMA has to date taken to court.<\/p>\n
\u201cIAG is New Zealand\u2019s largest insurer. It is a large and sophisticated market leader and accordingly plays a vital role in upholding market standards, yet its significant under investment led to widespread failures of its systems and processes, to the detriment of its customers. <\/p>\n
\u201cIt also failed to respond to and report many of the issues in an appropriate timeframe,\u201d Unger said.<\/p>\n
\u201cThe penalty has been set at a level that sends a clear message to the financial market \u2013 and particularly similarly large and well-resourced institutions \u2013 as to the importance of investing in robust systems and making good on the promises made to customers.”<\/p>\n
IAG New Zealand chief executive Amanda Whiting said the company is doing everything it can to prevent the issues happening again.<\/p>\n
Justice Andrew found that the nature and extent of IAG\u2019s contraventions to be \u201cthe most aggravating feature of its conduct\u201d. and said that the \u201cpenalty must be set at a level that sends a clear message to the financial market \u2013 and particularly similarly large and well-resourced institutions”.<\/p>\n
Justice Andrew also noted: \u201cIAG\u2019s knowledge of the breaches and the delay in reporting them to the FMA, particularly following the culture and conduct review, is an aggravating factor\u201d.<\/p>\n
The penalty reflects discounts for IAG\u2019s self-reporting, its early offer of admissions, its co-operation with the FMA\u2019s investigation, and the steps taken to remediate its customers.<\/p>\n
IAG responds<\/p>\n
IAG New Zealand chief executive Amanda Whiting said that since self-identifying the issues, the company\u2019s priority had been to \u201cput things right for impacted customers, offering a sincere apology and issuing refunds\u201d.<\/p>\n
\u201cWe are doing everything to prevent these issues happening again. The underlying issues have been fixed, and all affected customer\u2019s repayments were completed earlier this year,\u201d Whiting said.<\/p>\n
IAG New Zealand said it fully co-operated with the FMA\u2019s investigations and proceedings, while recognising that historically it made mistakes.<\/p>\n
The company said it had invested heavily in new systems and processes as they became available, and that \u201csignificant changes have been made\u201d, and \u201cwill continue to be made\u201d.<\/p>\n
Tom Raynel is a multimedia business journalist for the NZ Herald, covering small business, retail and tourism.<\/p>\n