26 March 2024

FMA warns Southern Cross Medical Care Society and Southern Cross Pet Insurance for Financial Markets legislation breaches

Media Release  
MR No. 2024 – 8

The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – has issued warnings to Southern Cross Medical Care Society (SCMCS) and Southern Cross Pet Insurance (SPCI) for failing to apply advertised discounts to each entities’ respective insurance products. 

The FMA is satisfied, and both entities accept, that they breached the fair dealing provisions of the Financial Markets Conduct Act by making false or misleading representations. The representations relate to the failure on each entities part to correctly apply advertised discounts to affected customers’ invoices, resulting in overcharged premiums. The FMA determined that the cause of each issue was due to poor controls and/or technical errors.  

SCPI made an initial report to the FMA in November 2022 disclosing some of the contraventions and later reported more details. Following these disclosures, further enquiries from the FMA and an internal review in the wider Southern Cross Group, the extent of the contraventions was established. 

SCPI failed to correctly apply the following discounts: 

  • Additional pet discount 
  • Direct debit discount 
  • Southern Cross membership discount. 

SCMCS failed to correctly apply the following discounts: 

  • Free child discount 
  • Healthy lifestyle rewards discount 
  • Low claims discount. 

The total amount of SCPI premiums overcharged was $424,508, affecting 7,542 customers, approximately 1.28% of its customer base. SCMCS overcharged $161,547 across 1,957 customers, approximately 0.2% of its customer base. 

Both entities have completed remediation programmes. SCPI has refunded 96% of its affected customers while SCMC has refunded 90% of its affected customers. 

FMA Director of Specialist Supervision Peter Taylor said: The FMA considers that making this warning public is proportionate considering a range of factors. The FMA has considered the level of harm caused and that both entities have repaid most of their customers. They cooperated proactively with the FMA and there is no evidence of any deliberate misconduct. Yet, the entities failed to apply the promised discounts over a prolonged period, in SCMCS’s case some 17 years.  

The FMA considers the wider Southern Cross Group did not provide adequate information to its customers when it publicly acknowledged the issues concerning its failure to properly apply the discounts. The FMA expects entities to have better systems and controls in place to identify and prevent issues as early as possible and to be transparent with customers when problems arise.” 



Both SCMCS and SCPI are separate legal entities within the Southern Cross Group.  

Media contacts:  

Andrew Park  
FMA Media Relations Manager  
[email protected]   
021 220 6770  

Matt Chatterton  
FMA Senior Adviser, Media Relations  
[email protected] 
021 241 7868