The Southern Cross Pet Insurance website. Photo: RNZ
The Southern Cross Medical Care Society and Southern Cross Pet Insurance have been given a formal warning after failing to apply advertised discounts to insurance products, resulting in consumers being overcharged nearly $600,000.
Both entities accepted they breached the fair dealing provisions of the Financial Markets Conduct Act by making false or misleading representations, the Financial Markets Authority (FMA) said.
The FMA said the cause was due to poor controls or technical errors.
The pet insurance business disclosed the issue to the FMA in November, which led to a wider internal review involving the Southern Cross Group.
Overall, 7542 customers were overcharged $424,508 for pet insurance premiums.
The group overcharged 1957 customers by $161,547 for medical insurance premiums, which had since been repaid by Southern Cross.
"The FMA considers that making this warning public is proportionate considering a range of factors," FMA director Peter Taylor said.
"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."