Tower Limited

Background

The FMA filed civil proceedings against Tower Limited (Tower) for failing to apply multi policy discounts to eligible customers’ premiums, resulting in approximately $9.5 million* in overcharges.  The FMA alleges Tower breached section 22 of the Financial Markets Conduct Act (FMC Act) by misleading customers about its multi policy discount offer since 10 September 2016. The alleged breach has affected approximately 65,000 customers (81,200 policies). These failures were due to fundamental flaws in Tower’s IT systems and a lack of adequate controls. Tower has so far reimbursed approximately 52,000 customers and paid approximately $9 million to the affected customers in remediation. 

The FMA is seeking a declaration from the court that Tower contravened the FMC Act and that a pecuniary penalty is paid to the Crown. 

In October 2017 Tower entered into a settlement agreement with the Commerce Commission whereby Tower agreed to fix the systems which caused the historic multi policy discount issues and remediate the affected customers. 

Timeline:

March 2024
The FMA has filed High Court proceedings against Tower Limited, alleging the insurance provider breached the Financial Markets Conduct Act by misleading customers about its multi policy discount offer. The alleged breach has affected approximately 65,000 customers resulting in $9.5 million in overcharged premiums.
Related Media Release: FMA files proceedings against Tower Limited for alleged fair dealing breaches
Related Legislation: Financial Markets Conduct Act 2013 No 69 (as at 01 March 2024), Public Act 22 False or misleading representations – New Zealand Legislation