FMA warns against misleading health insurance ads

FMA warns against misleading health insurance ads | Insurance Business New Zealand

FMA warns against misleading health insurance ads

The Financial Markets Authority (FMA) has warned the public about misleading advertisements that claim purchasing health insurance is needed to cover emergency medical bills for COVID-19.

This follows the FMA’s request for the removal of two advertorials posted by a financial adviser on Chinese-language social media platform WeChat, it said in a statement.

According to the FMA, the posts cited costs for COVID-19 hospitalisations in China – supposedly up to NZ$250,000 – and recommended people living in New Zealand, especially those with young children and the elderly buy health insurance to avoid the same financial risk.

However, the advertorials failed to mention that in New Zealand, emergency treatment and testing for COVID-19 is free, as it is covered by the public health system. The Ministry of Health said anyone with an infectious disease is eligible for publicly-funded health services. This is regardless of their citizenship, immigration status, and length of stay in New Zealand.

The FMA said that it was informed by a concerned party and it contacted the financial adviser to request them to remove the advertorials, which they complied with.

According to Liam Mason, FMA’s director of regulation, whether intentional or not, the posts would have misled readers into believing they need insurance for COVID-19 testing and urgent treatment, when in fact it isn’t necessary.

“The FMA will not tolerate behaviour from firms or individuals that appear to exploit the COVID-19 disruption, or conduct that preys on people who may be feeling additional stress at this time,” Mason said. “We will take any steps necessary to stop this kind of behaviour and hold those responsible to account.”