Last year ANZ was fined $280,000 by the High Court for misleading hundreds of customers over credit card insurance policy breaches.
The bank was found to have charged customers for credit card-repayment insurance (CCRI) which offered no cover or benefit and issued duplicate policies between April 2014 and November 2019.
OnePath Life and Cigna Life were the insurers for many of the CCRI policies for which ANZ was fined over.
The insurers notified the FMA of the issues during the life insurance culture and conduct review which the regulator undertook in 2019.
Today the FMA said in a statement that it had determined that OnePath and Cigna should be held to account for their respective roles as the insurers of many affected policies in the ANZ CCRI case because the companies should have had better oversight of their products when they were being sold and administered by ANZ.
Although OnePath and Cigna did not directly make any misleading representations to their customers, they admitted liability for the misleading representations made by ANZ (as their agent) under section 536 of the FMCA, a provision which can deem product and services providers to be liable for the conduct of their agents in certain circumstances. the regulator stated.
At the time of the breaches OnePath Life was owned by ANZ NZ but it sold the business to Cigna in November 2018.
A Cigna spokesman confirmed it would be paying all of the fine.
"Cigna NZ (and OnePath) have admitted to historic breaches of the Financial Markets Conduct Act in relation to legacy Credit Card Repayment Insurance policies."
He said all impacted customers were contacted and the issues put right in early 2020.
The companies no longer sell credit card repayment insurance.
The Cigna spokesman said it had put systems and processes in place to remedy the problem and to ensure it continued to deliver good customer outcomes for existing policy holders.
FMA General Counsel Liam Mason said that enforceable undertaking sent a message to the industry that product providers, underwriters, distributors, and intermediaries had a shared responsibility for ensuring customers were treated fairly and receive good outcomes for the products and services they receive.
"OnePath and Cigna received regular information from ANZ about the affected policies and should have had systems and controls to identify the issues and taken steps to ensure that their distributor was delivering their policies correctly."
