Insurance Council of NZ disciplines Youi
Following a disciplinary process, the Board of the Insurance Council of New Zealand (ICNZ) announced today Youi NZ Pty Ltd will pay the maximum financial penalty of $100,000 and has been warned that any future misconduct risks membership termination.
The financial penalty will be directed towards funding initiatives that improve consumers’ financial capability.
The Board found Youi breached the ICNZ rule which specifically requires ICNZ members to conduct their business in accordance with the Fair Insurance Code and in a legal, honourable and proper manner.
Youi has pleaded guilty in the Auckland District Court to 15 representative charges brought against it by the Commerce Commission. These charges included:
- making false or misleading statements on its website regarding consumers’ ability to obtain a quote online;
- making false or misleading statements to consumers including telling them their bank or credit card details were required to provide a quote;
- demanding payment or debiting consumers’ bank or credit cards without their expressed permission; and
- issuing invoices in relation to unsolicited insurance policies that did not specify the consumer was under no obligation to pay.
“ICNZ sets high industry standards for all members to follow and Youi’s business conduct has fallen well short of this expectation” said ICNZ President Chris Black.
“ICNZ has put significant effort into improving the reputation of the insurance industry. It has changed its Objects to that end and made significant changes to strengthen its Fair Insurance Code to raise the standards of service to consumers” said Black.
Youi accepts that its actions are in breach of its membership obligations and have damaged the reputation of the industry.
“The Board of ICNZ considered the most severe sanction it could impose – termination of Youi’s membership of ICNZ – but decided on a severe reprimand, the maximum financial penalty allowable and a warning that a recurrence would lead to termination” said Black.
In deciding not to terminate Youi’s membership, the Board took into account:
- Youi’s restoration of harm and unreserved apology to those customers affected
- Youi’s action in reviewing and changing its systems, processes and monitoring to prevent a recurrence
- absence of any previous misconduct
- Youi’s remorse and acceptance of the sanction being imposed.
- Youi’s co-operation with the Commerce Commission and voluntarily keeping ICNZ’s Board informed of the Commission’s investigation
- the benefits of keeping Youi compliant with the high service standards set by the Fair Insurance Code as a member of ICNZ
- Youi’s active contribution to the workings of ICNZ.