FMA files court proceedings against MAS over fair dealing provisions breaches

The FMA has filed High Court proceedings against Medical Assurance Society New Zealand Limited (MAS) and its subsidiaries for fair dealing breaches under section 22 of the Financial Markets Conduct Act 2013 (FMC Act).

MAS self-reported that it had multiple failures between 2014 and 2022:

Failure to apply the correct inflation adjustments to 6,297 customers

Failure to apply multi-policy discounts affecting 8,864 customers

Underpayment of life and disability claims affecting 104 customers

Failure to apply no claims bonuses correctly, affecting 1,235 customers

MAS’s failures were due to errors and deficiencies in its systems, including data entry errors by MAS employees. MAS has been co-operating with the FMA through its investigation.

The FMA is seeking a declaration that MAS contravened the FMC Act and a pecuniary penalty.

MAS has rolled out an unclaimed monies register in support of their remediation process to correct pricing and payout errors. While most affected clients have been compensated, the register encourages impacted members who haven’t been contacted to get in touch to receive their refund.

Jason McCracken, MAS chief, has apologised to members.

“As a mutual, MAS takes the trust our Members have in us very seriously and we apologise for the impact these errors have had. We remain committed to finding any issues and making them right.”

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