31 July 2025

Weather events claims - how did our insurance sector fare?

Our insurance weather events claims insights report has been published, looking at the insurance sector’s response to the Auckland Anniversary Weekend floods and Cyclone Gabrielle.

It recommends six areas for improvement: communications, project management and oversight, identifying and treatment of consumers in vulnerable circumstances, resourcing, complaints handling and business continuity.

The report found it was clear that the sector rose to meet an unprecedented challenge using lessons from the Canterbury earthquakes and has done further work to improve, said FMA Head of Insurance, Jane Brown.

FMA Head of Insurance, Jane Brown

“Following the events, however, we also became aware of consumer concerns relating to delays, complaints, and the experience of the insurance claims process generally," she said. “The next significant insurance event is a matter of ‘when’, rather than ‘if’. It is important that insurers take the time to review and tailor their claims processes to ensure that consumers’ expectations and needs are being met."

“With New Zealanders facing increasing risks around extreme weather events, maintaining confidence in the insurance sector is more important than ever. We look forward to working collaboratively with the fire and general insurance sector to support further conduct improvement.” 

Inside the FMA: fair dealing in financial services

In the first episode of our new podcast series Inside the FMA, we explore the FMA’s efforts to ensure fair dealing in New Zealand’s financial services sector.

Since our 2018 Conduct and Culture reviews, the FMA has taken 12 related fair dealing cases to court, leading to $16 million in penalties. More than $215 million in customer repayments was made in relation to these fair dealing issues.

Join Sinéad Lloyd, Manager, Investigations and Rachael Manttan, Head of Evidence and Investigations as they discuss the significance of fair dealing and the key learnings for the financial services sector.

Stay informed and learn how the FMA is working to promote the confident and informed participation of businesses, investors, and consumers in financial markets.

Listen now on your favourite podcast platform or watch above.

Southern Cross Travel Insurance admits misleading statements, pays more than $1 million

Southern Cross Benefits Limited (trading as Southern Cross Travel Insurance) has admitted liability for breaches of fair dealing laws and has paid $1,105,000 to the Crown.

The payment is made in lieu of a pecuniary penalty in respect of contraventions relating to misleading representations made by Southern Cross Benefits when it was offering Southern Cross Travel Insurance discounts to prospective customers.  

The payment is made under an enforceable undertaking provided by Southern Cross Travel Insurance to the FMA.

Customers were offered a discount for being a member of Southern Cross Medical Care Society, a discount for purchasing a Southern Cross Travel Insurance policy online and a discount for purchasing a Southern Cross Travel Insurance policy using certain promotion codes. 

While statements on the Southern Cross Travel Insurance website and emails to customers represented that discounts would be applied to customers’ entire premiums, the discounts were only applied to base premiums.

The FMA acknowledges Southern Cross Travel Insurance’s cooperation throughout the investigation. Southern Cross Travel Insurance has also fully remediated customers impacted by the discounts. 

Private asset valuation survey launches

We recognise that growth in private markets brings a broad range of opportunities through potentially enhanced investor returns, greater investor choice, and diversification through investment opportunities not listed on a public market that would otherwise be inaccessible to most investors.

We also know that investing in private markets comes with several risks that differ from those associated with public markets. The FMA is looking to better understand these risks.

In line with overseas trends, a significant transformation is underway: the rapid expansion of private markets is reshaping the landscape of capital markets. This is bringing about fundamental changes in New Zealand’s investment patterns, liquidity conditions and risk distribution. Listed companies now make up only a quarter of New Zealand’s capital market, with the rest taken up by private markets.

We’re about to release a survey to 30 KiwiSaver scheme managers to gather data that will:

• Improve our understanding of the current level and composition of private asset holdings by New Zealand managers. This information will form a baseline for monitoring future changes in the sector.
• Better understand the approach that Managed Investment Scheme (MIS) managers are taking to the valuation of private assets and the level and type of oversight they apply to third-party asset managers and valuers.

New research finds big rise in KiwiSaver investment risk 

New analysis from the FMA’s Data & Intelligence and Economics teams has taken a closer look at KiwiSaver investments and found a dramatic increase in the overall risk categorisation of KiwiSaver funds in recent years. 

Managers and supervisors of managed funds are required to disclose risks associated with each fund in clear and consistent terms, by presenting a risk indicator from 1 (least volatile) to 7 (most volatile).  

The proportion of KiwiSaver invested in risk category 5 funds has quadrupled from around 10% in 2021 to more than 40% in 2024, with the proportion in risk category 3 funds falling from 30% to 10% over the same period. 

This paper describes the increase and discusses potential drivers, including changes to policy settings, investor behaviour, and market volatility.

Climate-related disclosures: insights from our reviews

We are about to publish our Climate-Related Disclosures insights report from the second set of entities required to file their first-year climate statements. 

• We reviewed a further 39 climate statements that were prepared by climate reporting entities (CREs) for reporting periods ended between 30 April and 30 November. We continue to be pleased with the efforts that CREs have made to prepare and lodge their first set of mandatory climate statements under the regime.
• The purpose of this report is to provide timely and useful feedback and focus areas for climate reporting entities to improve disclosure in the future. 
• We will continue our educative and constructive approach for the next period of monitoring.

To keep up to date and receive the report when published subscribe to our climate-related reporting emails on our subscription page by selecting Climate Reporting Entity (CRE) information.  

FMA Executive Director, Response and Enforcement, Louise Unger

Mortgage fraud letter urges greater vigilance

There has been an increase in the number of suspected mortgage frauds being reported to the FMA. A letter has been sent to all New Zealand banks and non-bank deposit takers asking them to protect and support all borrowers by identifying, preventing and responding to mortgage fraud with fairness and vigilance. 

We have also highlighted certain mortgage fraud risk indicators that we are aware of, which lenders may not be adequately identifying or addressing to detect or prevent mortgage fraud through existing systems and controls.  

FMA Executive Director, Response and Enforcement, Louise Unger said the letter has also been shared with KiwiSaver providers, industry associations and other regulators.

"We expect that lenders will already be aware of mortgage fraud risks and have systems and controls in place to identify and mitigate these. This list of ‘red flags’ are mortgage fraud risk indicators that we are aware of, where fraud is being pursued for profit by third parties," she said. 

Got a question: We're here to help! 

We often feature questions received during industry interactions or sent to us directly.

How does the FMA work with international regulators?  

The FMA works closely with overseas regulators to align with global standards and strengthen our own regulatory approach domestically. This engagement recognises that issues like scams cross international borders and require coordinated responses. 

A key part of this effort is regulatory cooperation. We have formal agreements with international counterparts to share information on regulatory, supervisory, and enforcement matters.

Learn more about these agreements here: Regulatory co-operation | Financial Markets Authority 

Our membership in the International Organization of Securities Commissions (IOSCO) connects us to global best practice and helps shape the international financial regulatory agenda - ensuring New Zealand’s voice is heard in key global forums. 

IOSCO’s I-SCAN (International Securities & Commodities Alerts Network) is a good example of global cooperation. It aggregates scam warnings from over 150 regulators worldwide, enabling swift identification of unauthorised firms and fraudulent schemes. The FMA is an active contributor to this work.  

Do you have a question about regulations or what the FMA does? Now's your chance to ask! Simply email your question to questions@fma.govt.nz with "FMA Update" in the subject line.

New anti-scam alliance welcomed 

We welcome the recent formation of the joint operational partnership to tackle scams, the New Zealand Anti-Scam Alliance.  

“Collaboration is a vital factor in the fight against scams. We look forward to playing our part in the Alliance," said FMA Executive Director, Licensing and Conduct Supervision Clare Bolingford.

The FMA works closely to share intelligence and disrupt investment scams with other local and international regulators and cyber safety agencies such as NCSC (the National Cyber Security Centre). We support the Alliance and consider it a significant move forward in a co-ordinated New Zealand response to scams.

FMA impersonation scam

We are aware of scammers misusing the FMA's name to defraud investors. These scammers use fake FMA email addresses and provide fake documents using the FMA’s name and logo to persuade victims to make payments or disclose their personal information. 

How the scams work
Scammers impersonating the FMA will usually claim a person is entitled to some sort of payment. The reasons they give vary from case to case.

Recovery scams
If you’ve fallen victim to a scam in the past, FMA impersonators may claim they have recovered your lost funds. They will often say a payment is needed to cover taxes or transaction fees before the funds can be released. The scammers may tell you that you are entitled to a reimbursement or refund related to investments you’ve made in the past.

Money remittance scams
Scammers may claim that a payment to your account has been suspended or frozen due to regulatory compliance issues. 

Credit or loan application scams
Some scammers claim that the FMA is involved in reviewing or approving a loan or credit application you’ve submitted.  They often claim that funds will be released to you once a payment is made to cover transaction fees, taxes, or some other expense. These claims are false. Even if these payments are made no funds will be released.

The FMA does not: 

• Recover funds lost to scams
• Require any type of payment to release investment funds
• Grant or approve loan or credit applications
• Suspend or freeze payments/bank transfers
• Contact the public from an overseas telephone number
• Contact you from Gmail, Hotmail or other email addresses that do not end in @fma.govt.nz

Fake crypto platforms

A new warning has been issued about a large number of websites promoting fake cryptocurrency investment platforms to New Zealanders. 

We recommend extreme caution when dealing with any of the websites/platforms listed in our warning. They are not registered to provide financial services in New Zealand. 

If you have invested money with any of these platforms, you may not be able to withdraw it and may be asked to pay upfront fees to process any withdrawals.

Du Val update  

A one-day hearing at the High Court in Auckland earlier this month was held to determine an application by the FMA to strike out claims brought against it by a Du Val investor.

The claims advanced were negligence and breach of statutory duty. The High Court agreed with the FMA's application and struck out the claim.

“The FMA welcomes the decision, and confirmation that the FMA is required to exercise its functions in the public interest. Our investigation is ongoing and no further comment at this time,” said Head of Enforcement Margot Gatland. 

A continuation of asset preservation orders associated with Du Val was confirmed by the High Court this month. 

A number of entities within the Du Val group were placed in statutory management under the terms of the Corporations (Investigation and Management) Act 1989 in August last year.

Former financial adviser Murray McClune pleads guilty to theft charges 

Murray McClune, a former financial adviser, has pleaded guilty to two charges of theft by a person in a special relationship, following an FMA investigation.

Mr McClune had worked in the insurance industry since the late 1960s. He had an established book of clients, including some who had used his services for decades and considered him a friend. In addition to providing advice on insurance, Mr McClune also offered investment opportunities to some of his clients. 

Between 2016 and 2022 Mr McClune procured approximately $1.7 million from two sets of elderly clients – on the basis that he would invest the funds on their behalf. Instead, he used some of those funds for his own personal purposes.  

“Mr McClune dealt with the funds of elderly, vulnerable investors with whom he had a close personal relationship and took advantage of those relationships to misappropriate their funds," said Head of Enforcement Margot Gatland.

“New Zealand’s financial system relies on trust, transparency and fairness. In addition to being devastating to the victims, offending of this nature undermines public confidence in registered advisers and harms their reputations.  The FMA will respond to serious misconduct of this type where required and to the fullest extent of the law.” 

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