New Zealand Financial Markets Authority files High Court civil proceedings against IAG over alleged fair dealing breaches and NZD 35 million premium overcharges

The New Zealand Financial Markets Authority has filed a civil proceeding in the High Court at Auckland against IAG New Zealand Limited, alleging fair dealing breaches under the Financial Markets Conduct Act linked to incorrect premium pricing and failures to correctly advertise and apply discounts across its insurance products. The claim pleads eight causes of action relating to 11 alleged breaches of section 22 (false or misleading representations) in Part 2 of the Act. Some issues date back more than 20 years, but the claim is limited to conduct from the Act’s introduction in April 2014. The pleaded breaches affected about 269,000 customers, with approximately NZD 35 million in overcharges and a net gain to IAG of around NZD 31.1 million, including from inconsistent application of multi-policy and no-claims discounts, minimum-premium pricing algorithms that prevented discounts, misrepresented eligibility criteria, and errors affecting Earthquake Commission and Fire and Emergency New Zealand levies and non-optional policy extensions. IAG self-reported the issues following the FMA’s conduct and culture reviews, made an early admission of liability, fully cooperated with the investigation and committed to an undefended proceeding while progressing customer remediation and system upgrades. The matter will proceed in the High Court in Auckland.