The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko has filed proceedings at the High Court in Wellington against Medical Assurance Society New Zealand Limited (MAS) over alleged fair dealing breaches.
Seeking a declaration that the mutual insurer and its subsidiaries contravened the Financial Markets Conduct Act 2013 and a pecuniary penalty, the regulator alleges that MAS underpaid life and disability claims to eligible clients between 2014 and 2022 while failing to apply correct inflation adjustments, multi-policy discounts, and no-claims bonuses.
According to the announcement by the FMA, the inflation adjustment error affected approximately 6,267 customers; multi-policy discount, 8,864 customers; miscalculated benefit payments, 104 customers; and no-claims bonus, 1,235 customers. Reimbursements have been made for the respective issues.
The regulator, which highlighted that MAS has been cooperative, noted: “The FMA alleges MAS’s failures were due to errors and deficiencies in its systems, including data entry errors by MAS employees.
“MAS self-reported the issues listed above to the FMA between 2019 and 2022, including reporting one of the issues as part of the FMA and Reserve Bank of New Zealand’s Conduct and Culture reviews.”
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