Proceedings filed at the High Court in Wellington
The Financial Markets Authority has filed proceedings at the High Court in Wellington against Medical Assurance Society New Zealand (MAS) and its subsidiaries over fair dealing breaches.
FMA alleged that MAS contravened the Financial Markets Conduct Act, section 22, when it failed to apply the correct inflation adjustments on its customer policies, failed to apply multi-policy discounts and no-claims bonuses, and underpaid life and disability claims to eligible clients between 2014 and 2022.
In a statement, the regulator said the inflation adjustment error affected approximately 6,267 customers, with roughly $1,741,631 in overcharged premiums. MAS has reimbursed $780,501 to the affected customers.
The issue with the multi-policy discount affected approximately 8,864 customers, with approximately $3,318,997 in overcharged premiums. MAS has reimbursed $3,885,249 to the affected customers.
The miscalculated customer benefit payments issue affected some 104 customers, with approximately $1,047,059 in underpayments. MAS has reimbursed $1,160,638 to the affected customers.
Lastly, the incorrect application of multi-policy discounts and claims bonuses affected approximately 1,235 customers, with roughly $572,061 in overcharged premiums. MAS has reimbursed $639,821 to the affected customers.
“The FMA alleges MAS’s failures were due to errors and deficiencies in its systems, including data entry errors by MAS employees,” the regulator said, adding that the mutual insurer has been cooperative through its investigation since self-reporting the above-listed issues.
