FMA lays out expectations for insurers in battle against COVID-19

FMA lays out expectations for insurers in battle against COVID-19 | Insurance Business

FMA lays out expectations for insurers in battle against COVID-19

The Financial Markets Authority (FMA) has penned an open letter to insurance industry bodies, giving credit to the industry’s efforts in supporting customers amid the COVID-19 health crisis, as well as setting out its expectations going forward.

The letter was signed by Clare Bolingford, FMA’s director of banking and insurance, and was addressed to three chief executives – Tim Grafton of the Insurance Council of New Zealand, Richard Klipin of the Financial Services Council of New Zealand, and Roger Styles of the Health Funds Association of New Zealand.

In the letter, the FMA encouraged the insurance industry to adopt a proactive stance in dealing with the crisis, and identified several courses of action insurers should take.

These include insurers utilising additional print and digital media to publicise relief offers and encourage customers to make contact if they are in financial hardship, as well as harnessing call centres to contact elderly customers, checking on their welfare and directing them to support agencies. The FMA also urged insurers to provide resilience and vulnerability training for distributors so they can better support customers. Insurers were instructed to reduce or refund premiums if claims ratios are lower than planned, as well as provide additional support to existing claimants.

The FMA stressed that insurers should clearly communicate any COVID-19 policy exclusions that may impact cover and use of policies. Furthermore, customers should be treated fairly where changes are made to existing products. This includes clearly explaining modifications to customers who are due to renew their policies, such as ‘special notices’ highlighting where changes have occurred.

“Along with the other members of the Council of Financial Regulators, we will continue to actively monitor the insurance sector, in particular how companies are responding to customer needs at this time,” Bolingford said in the letter.

“Finally we do want to acknowledge the leadership you have taken with your members during this evolving situation, and appreciate your continued engagement.”