The Financial Markets Authority (FMA) is urging the government to give it power to “go in and poke around” inside banks and insurers so it can deal with potential problems for consumers before they happen, BusinessDesk reports.
It follows a joint statement by the FMA and the Reserve Bank of New Zealand (RBNZ) on their disappointment with the life insurance industry’s response to their conduct and culture review – with some unable to complete the exercise while others were unable to provide data on the number of policyholders affected by discovered issues or estimated costs of remediation.
“At the moment, we have no powers in law to go in and look at these things to allow us and the industry to get ahead of things before they happen,” Rob Everett, chief executive at FMA, told BusinessDesk.
He explained that they need to wait until they discover specific samples of mis-selling or other types of misconduct before they can act, so they want to have the power to examine how different banks and insurers handle complaints and manage risk and what governance systems they have in place.
The government seems receptive to the FMA’s request, with Commerce and Consumer Affairs Minister Kris Faafoi sharing the same sentiments as the FMA and RBNZ about the life insurance industry’s unwillingness to change.
Faafoi shared that they’re also working on fast-tracking measures to improve conduct in the financial sector, which will be announced soon.
Meanwhile, the FMA and RBNZ have given companies that didn’t produce satisfactory results or come up with remediation plans until December to do so.