Medical Assurance Society (MAS) chief, Jason McCracken, has apologised to members ahead of a High Court showdown with regulators over historic insurance product errors.
In a communiqué issued last week, McCracken told members that MAS uncovered the blunders, now subject to a legal action from the Financial Markets Authority (FMA), after a “fulsome review of our insurance services”.
“As a mutual, MAS takes the trust our Members have in us very seriously and we apologise for the impact these errors have had,” he says in the note. “We remain committed to finding any issues and making them right.”
Figures from the FMA indicate the various MAS mistakes – ranging from faulty inflation adjustments to premium mis-pricing and benefit underpayments – impacted more than 10,000 members dating back to at least 2014 with total remediation costing almost $7 million.
While MAS has compensated most of the affected clients (about 230 claims are pending due to missing contact details), the FMA is asking the courts to fine the Wellington-based mutual in addition to issuing a legal declaration for breach of fair dealing provisions.
“MAS self-reported the issues listed above to the FMA between 2019 and 2022, including reporting one of the issues as part of the FMA and Reserve Bank of New Zealand’s Conduct and Culture reviews,” the FMA release says.
“The FMA acknowledges that MAS has been cooperative with the regulator through its investigation since disclosing the issues.”
A MAS frequently-asked-questions page titled ‘Putting things right’ says despite a long record of providing insurance “from time to time we make mistakes”, noting:
“These sorts of errors are not unique to MAS but are issues that most insurers grapple with, as policy wordings and application processes evolve over time, and we modify the systems we use to administer our policies.”
McCracken, who joined the business as chief last year, says MAS can’t comment further on the FMA legal action “while it is before the courts”.
As reported last week, the medical-based financial services collective has seen some senior staff changes this month.