New Zealand’s insurance conduct regulator is navigating its most significant leadership disruption in years – and the timing could not be more consequential for the insurance sector, with the first CoFI regulatory returns due to the Financial Markets Authority (FMA) by September 30, 2026.
The departure of FMA chief executive Samantha Barrass on September 3, 2026, marks the end of a period of sustained governance turbulence at the regulator, not merely the latest episode of it. FMA chair Craig Stobo had stood aside in December 2025 and formally resigned in May 2026, following an independent review by Wendy Aldred KC that found his public commentary fell below the political neutrality standards expected of the head of an independent Crown entity. A new chair, James Miller – a former NZX chair and inaugural FMA director – was appointed on August 6, 2026, just four weeks before Barrass’ exit.
On August 4, 2026, the Ministry of Business, Innovation and Employment (MBIE), as the monitoring department for the FMA, started an independent investigation into matters raised in relation to workplace conduct and culture at the FMA. It appointed Kristy McDonald KC to lead the investigation and said it would ensure the process was “completed as soon as is reasonable.” The FMA board separately commissioned an independent employment investigation into matters concerning Barrass, led by Paul Wicks KC. On September 3, the FMA confirmed that the Paul Wicks investigation would be subsumed into the MBIE-led process. Although Barrass had announced in May 2026 that she would not seek reappointment when her term expired in January 2027, her actual departure was brought forward to September 3 – accelerated by her suspension, the open investigations, and personal circumstances, with her elderly father hospitalised in the UK.
The FMA’s internal data had indicated declining employee sentiment before the workplace concerns became public. An internal FMA survey conducted in September and October 2025 found that 59% of respondents saw a future for themselves at the FMA, while 80% said the work they did mattered and 72% said they were proud of their work. The results were lower than those recorded in the FMA’s February 2025 survey. In her departure statement, Barrass declined to address the specifics. “The last few weeks have been very challenging for me, as I have found myself on the receiving end of allegations, and where I have had to take time out for them to be investigated. I won’t comment further on them at this stage. That’s for the MBIE investigation process to get to the bottom of, and I trust it will do so,” she said.
The governance turmoil arrives as the insurance sector faces a concrete near-term compliance deadline. The first period covered by CoFI regulatory returns runs from July 1, 2025, to June 30, 2026, with returns due by September 30, 2026. Every licensed insurer in New Zealand – 46 in total, alongside 17 banks and 14 non-bank deposit takers – is required to file returns. The deadline falls just weeks after James Miller was appointed FMA chair and as the regulator manages the departure of chief executive Samantha Barrass and an independent investigation into workplace conduct and culture.
The FMA has said the data gathered through the returns will help identify trends and inform its subsequent monitoring and supervisory activity. It expects to publish themes from the CoFI regulatory returns in late 2026, while its broader regulatory approach includes desk-based, thematic and on-site supervision. The timing puts a new question in focus for insurers: how the FMA will translate its first sector-wide CoFI dataset into supervisory priorities as the regulator undergoes a change at the top of its executive leadership.
The FMA’s Financial Conduct Report (FCR) 2026/27, published June 30, 2026, set out the regulator’s priorities for the year ahead. It identified four cross-sector themes presenting significant risks to consumer and market outcomes: managing conflicts from remuneration structures, product design for new and redesigned products, complaints, and fraud detection and prevention. The report also identified specific insurance priorities, including product design, complaints data, and fraud detection and prevention. The FMA stated it would triage complaints and reports from product providers to prioritise investigations of adviser conduct that adversely affects people in vulnerable circumstances. It said it would prioritise mortgages and life and health insurance products, including products being sold to consumers through misleading or fraudulent activities, and focus on reports of insurance and mortgage advisers taking advantage of vulnerable people.
A thematic review of add-on insurance products and extended warranties, published in August 2026, highlighted weaknesses in distribution oversight. The FMA found that while insurers had arrangements intended to support fair consumer treatment, those arrangements did not consistently operate in practice in a way that provided assurance of fair outcomes. Insurers could demonstrate onboarding and training arrangements for intermediaries, but the regulator found limited evidence of oversight proportionate to the conduct risks associated with intermediated, commission-based distribution.
The review also found claims and loss ratios as low as 3% to 6% for certain products. The FMA cautioned that claims and loss ratios should not be considered in isolation, but said persistently low ratios raised questions about whether consumers were receiving meaningful benefits from some products. For insurers using intermediated distribution, the findings increase scrutiny of how sales practices are monitored and how conduct risks are managed across distribution networks.
The New Zealand Shareholders’ Association said it was aware of “systemic cultural issues” at the FMA and believed leadership departures and allegations of poor workplace culture had undermined confidence in the agency. In 2025, the FMA also surveyed stakeholders across New Zealand’s financial markets. Just over half – 56% – agreed it was easy doing business with the FMA, while 73% agreed the FMA was focused on outcomes that mattered for consumers and markets.
The statutory obligations of CoFI remain in force regardless of who holds the chief executive title. However, the combination of a September 30 regulatory returns deadline, an open MBIE investigation with no public timeline, and a chief executive search with no confirmed end date means insurers and their distribution partners are entering a critical compliance period without the regulatory clarity they would normally expect.
