Tower shareholders can breathe easy after a wide-ranging review of its conduct and culture didn't unearth any really dirty secrets.
The regulatory rumble that's been building in the local financial services sector for the past year finally reached general insurers when Vero owner Suncorp outed itself last week as having to get its house in order, booking an $8 million provision for customer remediation.
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Or in plain English, it took a leaf out of the late appliance retailer Alan Martin's book: "If it's not right we'll put it right — because it's the putting right that counts."
Suncorp said the provision was to make up to customers who hadn't received discounts when they should have. The insurer apologised for the errors, which it discovered after running the rule over its wholly-owned Vero and Asteron Life brands, and its AA Insurance joint venture.
"Work is already under way to contact affected customers and ensure they receive a full refund of any money owed to them. Customers who underpaid their premiums will not be asked to repay the difference but will have the correct premium applied from the date their cover renews," it said.
The regulators were informed, but Suncorp's misdemeanour can't have been much of a surprise for them. Reserve Bank governor Adrian Orr said as much last year when he told general insurers that the burden was on them to prove they were squeaky clean.
And while the Financial Markets Authority welcomed Suncorp's disclosure, it said it expected more conduct issues lurked in the sector and that this was just the "tip of the iceberg".
That pessimism may be premature. While New Zealand's dominant general insurer, Insurance Australia Group, said it was feeling the pinch of a growing regulatory burden — those swelling compliance teams don't work for free — its internal review hadn't uncovered anything needing funds to be squirrelled away for bilked customers.
Similarly, Tower, which claims 5 per cent of the local market, went through its 350,000 or so policies and came away reasonably happy.
Chairman Michael Stiassny told shareholders his firm wanted to take the lead in reviving flagging public confidence in the sector. Its smaller size was an advantage and gave it greater flexibility to change.
"We have undertaken a conduct and culture review. We've said there is room for improvement and we aren't perfect, but we have nothing like Suncorp's issues. We are quite comfortable, very comfortable," he told BusinessDesk after the meeting.
What's even more surprising was Tower's confidence given it recently bought Youi NZ's 34,000 policies from the South African insurer whose sales tactics were so outrageous it copped a $100,000 penalty from the industry body, the Insurance Council, as well as a $320,000 court-ordered fine in 2016.
Tower had been due a win after a fairly torrid few years. Not only has it continued to uncover nasty liabilities from its Canterbury earthquake claims and got embroiled in a protracted dispute with the Earthquake Commission over who should pay what, but the insurer had to twice raise equity to ensure it met the Reserve Bank's regulatory capital rules.
That's not to say that Tower will get an easy ride on the conduct front.
Amid the flurry in Parliament's first week back from the Christmas holiday, legislation to regulate conduct by banks and insurers passed its first reading.
Commerce Minister Kris Faafoi said the new law would require financial services firms to have the policies, systems and controls in place to make sure "they're considering consumers' interests and treating them fairly in all aspects of their business".
"Fair treatment of consumers is a broad concept that ... goes to the heart of every aspect of business."
It seems strange that treating customers right needs regulating — and one the National Party didn't buy — but you don't have to look very far to see where things have gone wrong.
Australia's banking royal commission found all kinds of misdeeds across the whole spectrum of the financial services sector. And just this month there was speculation "the putting right" would cost as much as A$10 billion ($10.4b).
Suncorp and IAG have only taken provisions of A$60 million and A$80m respectively to make their Australian customers whole. However, IAG faces a class action of as much as A$1b over the way it sold add-on car insurance for a decade that may shoot that estimate out of the water.
No one has suggested New Zealand's industry has stooped to the lows seen across the Tasman, even if the FMA and RBNZ have put them all on notice.
And if nothing has turned up in half of New Zealand's general insurance market, one has to wonder how deep the rot really is, or if there's anything on the turn at all.