The FMA's Clare Bolingford outlines why and how New Zealand is getting a conduct regime overseeing financial institutions, and what it means for customers

I am currently in the middle of an insurance problem.  I have an upcoming surgery in October, I put a claim in with AIA but I got an email back saying the policy was no longer valid, with an accompanying letter which was sent by standard mail to my old address (I moved last year), dated February 2022 and stating that the premiums were overdue and that if I didn't pay the policy would be cancelled.  Of course, I never got this letter.  The reason why the premiums were in arrears is that I lost my wallet late last year and cancelled all my credit cards and the premiums were by AP form my credit card.

I put this to AIA and asked them to reinstate the old policy but they refuse to do it.  They want me to apply for a new policy, in which the upcoming surgery will of course be excluded.

Any advice?

Thanks

I think the central principles are Fair treatment AND Transparency.  Please don't forget about transparency because if that part of the Conduct of Financial Institutions is properly implemented customers will have the ability to assess one bank against another.  There are so many instances of zero transparency it will be hard for the FMA to properly regulate unless they actually know how the market works.  Remember how you THINK something works versus how it should work, how it actually works, how it is regulated to work are completely different in most cases.

Claire - you and your team have your work cut out.  I hope you have the knowledge of how it actually works in practice so that you can then apply your guidance and the intent of the Act to make it work Fairly AND Transparently.  Good luck you will need plenty of it.

Couple of years ago had a call from Westpac, someone was trying to tell me that I was a good candidate for a new credit card and I am now “qualified” to apply for it and get amazing fees or something else...

And then asked me if I wanted to get it,- I said no. She asked why - and I simply answered- “…hmm because I don’t like to be in debt “ , She stuck for a couple of seconds, this answer surely was not in the script.

Just wondering, when they will finally be liable for proactively indebting other people.  

New regulations don't always help the customer though. I asked about increasing our credit card limit recently as increasingly I have to make an extra payment before the due date to stay under the limit. (Of course pay it all off at the due date). But apparently after the responsible lending laws late last year, every limit increase has to go through a full credit application! What a hassle. 

I wonder if this fair & transparent will be anything like Jacinda's Labour Govt's?

I have no problem with government identifying fraudulent behaviour, ie behaviour intended to deceive, and to legislate effectively to highlight "bad" behaviour. The second leg is a state responsibility to ensure such behaviour is detected and successfully prosecuted in a consistent manner.

But imagining government can rule on such a subjective term as "fairness", and expect civil servants to have clear knowledge of complex commercial  activities, is a bit of a stretch.

I have zero confidence in the FMA who show every sign of being just another state bureaucracy mainly focussed on their own comfort. They generally seem to be totally unaware that by legislating all manner of procedures to protect the person on the street, they simply introduce more costs which will in the end, have to be paid for by the smuck end consumer.