Media Release
MR No. 2026 – 27
The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko is publishing the findings of engagement with insurers on how they manage customers’ interests during periods of short-term sales campaigns and incentives.
The FMA wrote to insurers last year after observing some insurers offering benefits and campaigns designed to drive business coming from third parties such as financial advisers. These types of incentives, if not carefully managed, can create conflicts of interest that put the fair treatment of consumers at risk.
Insurer benefits and campaigns insights outlines observations of current industry practices and reinforces expectations under the Conduct of Financial Institutions (CoFI) regime, which requires insurers to treat consumers fairly.
Michael Hewes, Director of Deposit-taking Insurance and Advice, says that while practices have moved on since FMA work in this area in 2018 and the introduction of the CoFI regime, its important insurers manage the risks appropriately.
“These benefits and campaigns, or soft commissions, have a place but insurers should actively consider these risks to ensure their fair conduct programmes are designed to support fair treatment of consumers.
“We want these insights to support insurers to take consumers’ interests into account when designing, offering and managing benefits and campaigns.”
While most insurers have processes in place to identify and manage these risks, their approaches vary. The FMA is encouraging insurers to take a proactive and outcomes focused approach, considering the real-world impact of soft commissions on their customers.
Areas of focus identified include:
- The need for broader stakeholder involvement when designing incentives to better identify risks early and consider how these align with the fair conduct principle
- Clear governance, record-keeping and approval processes
- Stronger monitoring of how incentives influence behaviour and consumer outcomes
- Greater use of proactive, outcomes-focused reviews rather than relying solely on reactive controls, such as complaints or reactive feedback.
The work aligns with a focus in the FMA’s Financial Conduct Report that consumers and investors understand fees, incentives and commissions and the outcome of well informed consumers and investors.
Read the full report on our website: Insurer benefits and campaigns insights
ENDS
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