Only 42% of stakeholders agreed that the Financial Markets Authority’s (FMA) regulatory approach is proportionate and beneficial in 2025/26, down from 55% the year before, according to the regulator’s annual Ease of Doing Business Survey (EDBS).
The decline was one of several falling metrics in the FMA’s annual report for the year to June 30, 2026. Agreement that the FMA is focused on outcomes that matter for consumers and markets dropped from 73% to 59%. Perceptions of its effectiveness in implementing remit changes fell from 54% in 2024 to 50%.
Not all measures declined. Agreement that the FMA’s supervisory approach supports the industry rose from 42% in 2024 to 60% in 2025, and held steady at 60% in 2026. But the proportionality drop stands out given the FMA’s expanding scope. From July 1, 2026, the regulator took over credit regulation from the Commerce Commission under the Credit Contracts and Consumer Finance Act 2003, making it the single conduct regulator for New Zealand’s financial markets. The Contracts of Insurance Act 2024 (CoIA) takes effect on November 15, 2027, giving the FMA new powers to regulate the fairness of insurance contract terms and insurer conduct in direct dealings with policyholders, according to the annual report.
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The survey found that only 53% of stakeholders agreed the FMA develops and implements streamlined systems and processes for licensed entities, well below the regulator’s 70% target.
Qualitative feedback pointed to long delays, unclear answers, and uncertainty about whether issues had been resolved, the annual report said. Agreement that stakeholders had benefited from their engagements with the FMA was 69%, a drop the report described as “statistically significant.”
Consumer confidence in the quality of financial markets regulation sat at 65%, below the FMA’s 75% target. The annual report noted this measure covers three sectors: insurance, KiwiSaver, and banking providers.
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The annual report outlined several insurance-focused actions during the year. The FMA published findings from a review of domestic fire and general insurers’ claims processes during the severe weather events that affected the North Island in early 2023. It also released research on insurer conduct around non-monetary benefits and short-duration sales campaigns.
On enforcement, the FMA took civil proceedings against IAG New Zealand for fair dealing contraventions affecting about 269,000 customers across a range of insurance products, resulting in around $35 million in overcharges. The court ordered IAG to pay a $19.5 million pecuniary penalty.
The FMA also co-led the Insurance Affordability Review with other Council of Financial Regulators (CoFR) members to examine the drivers of residential insurance affordability and market dynamics.
To prepare for CoIA, the FMA wrote to insurance chief executives outlining its expectations and engaged with firms and industry associations, the annual report said.
The annual report confirmed that former chief executive Samantha Barrass resigned in September 2026 after four and a half years. The board is searching for a permanent replacement. In August 2026, the Ministry of Business, Innovation and Employment (MBIE) announced an independent investigation into workplace conduct and culture at the FMA.
Acting chief executive Alastair Hercus said the FMA delivered against “almost all” of its priorities during the year.
“2025/26 was a year of significant change and delivery for the FMA. The report also acknowledges areas where the FMA needs to improve, drawing on feedback from stakeholders and consumers about their experience of regulation and engagement with the organisation,” Hercus said.
Newly appointed board chair James Miller said an updated strategy is being developed.
“The results show the areas where the FMA is making a positive impact, but they also highlight areas where stakeholders expect us to do better. That feedback is important. As a board, we expect the organisation to listen carefully, respond to those concerns and continue improving the way it delivers on its mandate,” Miller said.
The FMA board also said it will publish conflict of interest management plans for each board member on its website, alongside the FMA’s conflicts of interest policy.
