OnePath Life (NZ) and Cigna Life Insurance New Zealand have admitted liability for breaching the fair dealing provisions of the Financial Markets Conduct Act 2013 (FMCA) and will jointly pay $180,000 to the Financial Markets Authority (FMA).
According to the FMA, the breaches were related to misleading representations ANZ made when issuing monthly credit card statements to certain ANZ customers who held credit card repayment insurance (CCRI) policies with Cigna and OnePath.
In 2021, ANZ was fined $280,000 by the High Court for making misleading representations to 307 CCRI customers. OnePath and Cigna were the insurers for many of the CCRI policies distributed by ANZ. The case, which was filed by the FMA, was about duplicate CCRI policies or CCRI policies that offered no cover or benefit to customers.
OnePath and Cigna notified the FMA of the issues during the Life Insurance Culture and Conduct Review. The regulator determined that the two insurers are accountable for their respective roles as the insurers of many affected policies in the ANZ CCRI case. The FMA said this was because the companies should have had better oversight of their products when they were being sold and administered by ANZ.
“Although OnePath and Cigna did not directly make any misleading representations to their customers, they admitted liability for the misleading representations made by ANZ (as their agent) under section 536 of the FMCA, a provision which can deem product and services providers to be liable for the conduct of their agents in certain circumstances,” the FMA said.
In its response, Cigna said it is “[committed] to developing and maintaining effective policies, systems, and processes to support good customer outcomes and to prevent issues of the kind referred to in these Undertakings from occurring in the future.”
OnePath was acquired by Cigna in 2020 and voluntarily exited the insurance industry in January 2020. It is no longer a licensed insurer in New Zealand.
“This enforceable undertaking sends a message to the industry that product providers, underwriters, distributors, and intermediaries have a shared responsibility for ensuring customers are treated fairly and receive good outcomes for the products and services they receive,” said FMA general counsel Liam Mason (pictured above). “OnePath and Cigna received regular information from ANZ about the affected policies and should have had systems and controls to identify the issues and taken steps to ensure that their distributor was delivering their policies correctly.”
