New Zealand's insurance and financial-advice sectors run on a layer of self-regulatory codes that sit on top of the law (the FMC Act, the financial advice regime, and the Contracts of Insurance Act 2024). The codes that matter most to Bob are the FSC Code of Conduct (life and health insurers), the ICNZ Fair Insurance Code (general insurers), and the IBANZ professional standards (brokers). On top of the codes, every licensed provider must belong to an external dispute resolution scheme (IFSO or FSCL), and the published decisions from those schemes are a rich, plain-English record of what good and poor conduct actually look like at claim time. This file summarises each in our own words and pulls out the recurring lessons.
FSC Code of Conduct: who it binds and how it is enforced
The Financial Services Council (FSC) is the industry body for New Zealand's life, health, disability and income-protection insurers (its members pay out billions in life and health claims each year), so its Code of Conduct is the most directly relevant code for an income-protection product. The Code is binding on FSC members and came into force on 1 January 2019. It is built around nine Code Standards grouped under three core objectives: a principal ethical standard (carry on business professionally and with due care), customer-perspective standards (clear two-way communication), and good-customer-outcomes standards (responsible products, training, conflict management and fair treatment). Enforcement is real: potentially material breaches are assessed by an independent disciplinary committee, and sanctions run from a reprimand, to fines of up to NZ$100,000, through to expulsion from the FSC. The practical implication for Bob is that an FSC-member insurer it deals with has committed to these standards, and Bob's own conduct (clear questions, plain explanations, fair treatment) should mirror them.
Source: Financial Services Council - Code of Conduct (https://www.fsc.org.nz/code-of-conduct) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
FSC Code of Conduct: the nine Code Standards
The nine FSC Code Standards, in the Code's own wording, are: (1) members must carry out business professionally, with due care, competence and skill, and act with integrity, behaving in a way that promotes public confidence in the financial services industry; (2) members must communicate with customers clearly and effectively; (3) members must make reasonable efforts to ensure customers are given sufficient information to make informed decisions about products and services; (4) members must seek and consider customer feedback; (5) members must design and distribute products responsibly; (6) members must provide employees and distribution-channel personnel with appropriate training; (7) members must maintain appropriate internal processes for explaining the risks to a customer of replacing or retaining an existing product or service; (8) members must manage conflicts of interest fairly and in a way that promotes good customer outcomes; and (9) members must treat customers fairly. For an income-protection intake, Standards 1, 2, 3 and 9 are the ones Bob should internalise: ask clear questions, explain plainly, give people enough to decide, and treat them fairly throughout. Standard 7 is the "replacement business" guardrail: switching someone off an existing policy must come with a clear explanation of what they could lose.
Source: Financial Services Council - Code of Conduct (https://www.fsc.org.nz/code-of-conduct) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
ICNZ Fair Insurance Code: scope and general responsibilities
The ICNZ Fair Insurance Code is the conduct code for members of the Insurance Council of New Zealand. It covers general insurance products (house, contents, motor, travel, business) and explicitly excludes health and life insurance, so it does not directly govern an income-protection or life policy. It still matters to Bob as the clearest published statement of conduct norms in NZ insurance, and it covers individuals and small entities (19 or fewer employees). Its general responsibilities read like a conduct checklist: act transparently, with integrity and utmost good faith; act in customers' interests by treating them honestly and fairly; develop, market and sell products responsibly; identify and address poor conduct internally; and communicate clearly, including answering questions accurately (in writing if asked), explaining what information the customer must give, explaining decisions clearly, and giving access to the policy wording in plain English. The Code also reinforces privacy rights (access to information relied on in a claim, correction of errors) and requires reasonable steps to help people with disabilities or who speak English as a second language. The current version took effect on 1 April 2020.
Source: Insurance Council of New Zealand - Fair Insurance Code 2020 (https://www.icnz.org.nz/wp-content/uploads/2023/01/Fair_Insurance_Code_2020.pdf) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
ICNZ Fair Insurance Code: claims-handling timeframes and standards
The Fair Insurance Code sets concrete, teachable claims-handling commitments that are a good benchmark for any insurer Bob deals with. When a customer claims, the insurer will: explain how to report the claim and what information is needed; keep the customer informed; settle all valid claims quickly and fairly; and clearly explain the reasons if it declines a claim in whole or in part. On timeframes, the insurer will acknowledge receipt of a claim within 5 business days and decide whether to accept it within 10 business days of the date it has all the information it needs. If a claim is complex or depends on third parties and those timeframes cannot be met, the insurer must explain why, give an expected timeframe, and update the customer at least once every 20 business days (or another agreed interval) until the claim is resolved. The insurer will only ask for and rely on relevant and material information. Catastrophes and disasters can stretch these timeframes, but the insurer must still use best efforts and respond in a professional, practical and compassionate manner.
Source: Insurance Council of New Zealand - Fair Insurance Code 2020, claims section (https://www.icnz.org.nz/wp-content/uploads/2023/01/Fair_Insurance_Code_2020.pdf) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
ICNZ Fair Insurance Code: disclosure, non-disclosure and vulnerable customers
The Code is also a plain-language explainer of the duty of disclosure as it applied to general insurance, and the principles carry over conceptually to life and health. The insurer must ask questions that help the customer understand what is needed, tell the customer that all material information must be provided whether or not it is specifically asked about, give a clear summary of key features including what is not covered, and explain what may happen if responsibilities are not met. "Material" information is defined plainly as information important enough to make a difference to the insurer's decision about whether to offer cover and on what terms (examples given include prior claims, previous refusals of insurance, criminal convictions, and pre-existing medical conditions for travel cover). The Code warns that failing to disclose material information may mean a claim is refused in whole or in part, or the policy cancelled from its start date, but also commits the insurer to "respond reasonably" to non-disclosure rather than treat every omission as fatal. On vulnerability, insurers must identify and respond to customers experiencing vulnerability based on their individual circumstances, with reference to the Human Rights Commission's best-practice guidelines. Note: from late 2027 the Contracts of Insurance Act 2024 replaces this consumer "duty of disclosure" with a narrower duty to take reasonable care not to make a misrepresentation (see the dedicated section below).
Source: Insurance Council of New Zealand - Fair Insurance Code 2020, disclosure section (https://www.icnz.org.nz/wp-content/uploads/2023/01/Fair_Insurance_Code_2020.pdf) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
ICNZ Fair Insurance Code: complaints and the path to external dispute resolution
The Code sets out a clear complaints ladder that mirrors how every NZ provider must operate. If a customer complains, the insurer acknowledges receipt within 5 business days, gives the name and contact details of the person handling it, refers it to internal dispute resolution, and responds within 10 business days of having all the information it needs (with at-least-every-20-business-day updates until resolved). The insurer will try to resolve the complaint through its internal process within two months. If it cannot resolve the complaint to the customer's satisfaction, it must explain its reasons in writing and offer a "deadlock" letter so the customer can escalate to the insurer's external dispute resolution (EDR) scheme. The customer can also go to the EDR scheme after two months even without a deadlock letter. The Code notes the time limit to refer a complaint after a deadlock letter differs by scheme (longer for IFSO, shorter for FSCL), and that taking a complaint to the EDR scheme is free to the customer. This internal-first-then-external structure is the backbone of NZ financial-services complaint handling and is what Bob should explain to any unhappy customer.
Source: Insurance Council of New Zealand - Fair Insurance Code 2020, complaints section (https://www.icnz.org.nz/wp-content/uploads/2023/01/Fair_Insurance_Code_2020.pdf) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
IBANZ: what it is and where it sits in the regime
The Insurance Brokers Association of New Zealand (IBANZ) is the voluntary professional body for fire, general and liability insurance brokers and advisers. It is not the statutory regulator: the binding regime for anyone giving regulated financial advice to retail clients is the Financial Markets Conduct Act 2013 (FMCA), administered by the Financial Markets Authority (FMA), under which advice must be given through a licensed Financial Advice Provider (FAP). IBANZ's own role is to lift and assure standards: it advocates for the sector as a "single voice" to government (MBIE, FMA, Treasury), runs a professional-development/CPD programme, and operates a Code of Professional Conduct backed by a complaints committee, which it says gives the public assurance that members act professionally and ethically. The IBANZ Code is deliberately written to "mirror" the statutory FMCA Code and add member-specific standards on top, so for Bob the takeaway is that broker conduct in NZ is governed primarily by FMCA/FMA, with IBANZ as a reinforcing professional layer. Redress that seeks compensation always routes to the member's external dispute resolution scheme (every provider must belong to one), not to IBANZ.
Source: IBANZ - About Us (https://ibanz.co.nz/About-Us/10009/) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
IBANZ Code of Professional Conduct: the broker standards
The IBANZ Code of Professional Conduct (current version effective 1 November 2025) binds members, their employees and agents, with an overriding obligation to conduct business with integrity and comply with NZ law. It has 13 Standards in two parts. Part 1 (ethics, conduct and client care) covers: treating clients fairly, including communicating clearly and not exploiting a client's lack of financial knowledge or vulnerability (Standard 1); acting with integrity and avoiding or managing conflicts of interest (Standard 2); giving advice that is suitable on reasonable grounds, having regard to the client's situation, needs, goals and risk tolerance (Standard 3); taking reasonable steps to ensure the client understands the advice and its limitations (Standard 4); protecting client information consistently with the Privacy Act 2020 (Standard 5); restraint on claiming to be "independent" where a tie or benefit means a reasonable client would disagree (Standard 6); a bar on borrowing from or lending to retail clients (Standard 7); not quoting premiums or terms without written underwriter support (Standard 8); maintaining an internal complaints process, acknowledging complaints, pointing clients to the member's EDR scheme and keeping a complaints register (Standard 9); and complying with named Acts including the FMCA, the Financial Service Providers (Registration and Dispute Resolution) Act 2008, the Insurance Intermediaries Act 1994, the Fair Trading Act 1986 and the Privacy Act 2020 (Standard 10). Part 2 (competence) requires baseline capability equivalent to the New Zealand Certificate in Financial Services (Level 5) to advise retail clients (Standards 11-12) and ongoing CPD planned and completed at least annually (Standard 13). For an income-protection adviser these map almost one-to-one onto good intake conduct: be clear, be suitable, manage conflicts, and make sure the client actually understands. Note: the current Code has no dedicated client-money/trust-account standard; client money is governed mainly by the Insurance Intermediaries Act 1994. [VERIFIED-AI 2026-06-21: confirmed. The IBANZ Code of Professional Conduct effective 1 November 2025 is the current version (replacing the 15 March 2021 version). The Insurance Intermediaries Act 1994 imposes the client-money trust obligation: premium/client money must be paid into an "insurance broking client account" and is treated as though subject to a trust in favour of the persons entitled to it, with investment restricted. Sources: ibanz.co.nz (Code) + legislation.govt.nz Insurance Intermediaries Act 1994.] [VERIFY] the exact Insurance Intermediaries Act section numbering for the client-account/trust provisions (broking-account part, approximately ss 13-16) before citing a section number.
Source: IBANZ - Code of Professional Conduct, effective 1 November 2025 (https://ibanz.co.nz/filescust10/IBANZ%20Code%20of%20Professional%20Conduct%201%20November%202025.pdf) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
External dispute resolution: every provider must belong to a scheme
New Zealand backs the industry codes with a statutory dispute-resolution safety net. Under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 ("the FSP Act"), every financial service provider serving retail clients (including every licensed FAP) must belong to one of four approved external dispute resolution (EDR) schemes; you cannot register or stay registered as a provider without one. The four schemes are the Insurance & Financial Services Ombudsman (IFSO), Financial Services Complaints Ltd (FSCL), the Financial Dispute Resolution Service (FDRS), and the Banking Ombudsman Scheme (BOS). A consumer does not get to pick the scheme: they use whichever one their provider belongs to. All four follow the same shape: the consumer must complain to the provider first and let it try to resolve the matter (typically up to two months) until the complaint reaches "deadlock", and only then can the scheme investigate (usually within three months of deadlock). The schemes are free to consumers. For Bob this is foundational: it must tell an unhappy customer which scheme its provider belongs to and how to escalate. [VERIFIED-AI 2026-06-21: the FSP Act EDR-membership requirement is confirmed (retail-facing providers must belong to an approved scheme). On the merger: the proposed IFSO/FSCL merger (targeted 1 July 2025) was paused on 13 August 2024 on legal advice, because the two entities are differently structured; IFSO agreed to first incorporate as a limited company, and its current Terms of Reference (effective 1 July 2025) are issued as "Insurance & Financial Services Ombudsman Limited". As of mid-2026 no completed merger has been announced, so the four-scheme picture still stands. Sources: ifso.nz merger update (13 Aug 2024), fscl.org.nz, legislation.govt.nz FSP Act 2008.]
Source: Companies Office FSP Register - Choosing a dispute resolution scheme (https://www.fsp-register.companiesoffice.govt.nz/help-centre/dispute-resolution-schemes/choosing-a-scheme/) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
IFSO: the Insurance & Financial Services Ombudsman scheme
IFSO is a free, independent, approved EDR scheme that investigates complaints about its members (insurers and other financial service providers who belong to it). The complaint path is provider-first: the customer raises the complaint with their provider, the provider gets a chance to resolve it (up to two months) and the complaint reaches "deadlock" when the provider issues its final response or two months pass; only then can IFSO investigate, and the customer generally has three months from deadlock to bring it. Critically, IFSO is not a regulator (that is the FMA or the Reserve Bank): it cannot fine providers or impose penalties, and its main lever over a non-complying member is terminating that member's scheme membership. Its decisions bind the provider if the consumer accepts them, but they do not bind the consumer, who can reject the decision and still go to the Disputes Tribunal or the courts. As part of a 2024 reform, compensation caps were standardised across all four schemes. [VERIFIED-AI 2026-06-21: confirmed against the IFSO Terms of Reference (effective 1 July 2025): the IFSO Applicable Monetary Limit is NZ$500,000 (+GST if applicable) per claim for lump-sum / general loss, NZ$2,798 (+GST) per week for products providing regular payments (CPI-adjusted each 1 July), and special compensation capped at NZ$10,000 (+GST). The $500,000 lump-sum cap took effect for complaints deadlocked on or after 18 July 2024 (up from $350,000). FSCL is reported to have aligned to the same $500,000 cap on the same date, but that was not confirmed from FSCL's own rules. Which cap applies depends on the deadlock date, so check the live scheme rules before quoting a figure. Sources: ifso.nz Terms of Reference (1 Jul 2025); FSCL figure per secondary reporting (confirm at fscl.org.nz).]
Source: Insurance & Financial Services Ombudsman - about the scheme and complaint process (https://www.ifso.nz/pages/what-happens-when-a-complaint-is-made-to-the-ifso-scheme) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
FSCL: Financial Services Complaints Ltd
FSCL is the other large approved EDR scheme, free and independent for consumers, doing the same statutory job as IFSO under the same FSP Act. Its members span non-bank lenders and finance companies, insurers, mortgage and insurance brokers, financial advisers and fund managers. The complaint process mirrors IFSO's: the consumer goes to the provider first, the provider gets a chance to resolve it / issue a final response (deadlock), then FSCL can investigate, mediate, and if needed issue a formal decision. The same standardised compensation caps apply (see the IFSO section and its verification flag). The main practical differences between FSCL and IFSO are which providers belong to each and their legal structure (FSCL is a limited liability company; IFSO is an incorporated society), which is also why a proposed merger between them is legally complicated. Together IFSO and FSCL handle roughly 90% of non-banking financial-services complaint cases.
Source: FSCL - our role and the complaints process (https://fscl.org.nz/about-us/our-role/) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
Dispute lesson: non-disclosure and misrepresentation (the top decline reason)
Non-disclosure is the single most common reason consumer claims are declined, and the IFSO/FSCL case studies show the same patterns again and again. IFSO reports that roughly 10% of its complaints involve non-disclosure, and the two things people most often fail to disclose are pre-existing medical conditions and criminal convictions. The recurring lessons: (1) Under the current duty of disclosure the obligation is proactive: applicants must volunteer all material information, so "I wasn't asked" is not a defence. (2) "Material" is judged by the prudent-underwriter test: information a reasonable, experienced underwriter would want in order to decide whether to offer cover and on what terms (decline, loading, or exclusion), not what the consumer personally thought mattered. (3) You do not need a confirmed diagnosis to have something to disclose: symptoms, tests, investigations and medication all count (FSCL's undiagnosed-condition and symptoms-not-disclosed cases turn on exactly this). (4) Old or seemingly trivial facts can still be material (an IFSO case treated a historical anaemia diagnosis as material). (5) Remedies scale with culpability and with what the insurer would have done with the truth: deliberate concealment can mean full avoidance and no payout, while honest mistakes increasingly attract the proportionate outcome the insurer would have applied (a reduced benefit, a retrospective premium loading, or an exclusion). (6) Non-disclosure can leave a customer entirely uninsured, not just declined for one claim. The broker takeaway is to ask broad, plain-language questions at intake, specifically probe medical history, tests and medication, prior claims and convictions, and record what was disclosed.
Source: Insurance & Financial Services Ombudsman - non-disclosure guidance (https://www.ifso.nz/pages/non-disclosure) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
Dispute lesson: claims declined for the wrong reasons
The schemes do find against insurers, and the patterns where a decline gets overturned are just as teachable. (1) Onerous or unusual policy conditions that were not fairly drawn to the customer's attention: in one IFSO case a contents-theft claim was declined for breaching a "securely locked when unattended" condition, but IFSO held the condition was unusual and onerous, so the insurer had a duty to flag it, and simply mailing an updated schedule was not enough; the more onerous the term, the greater the duty to highlight it. (2) Exclusions or definitions read too widely: outcomes turn on the exact wording, and this cuts both ways (in a yacht-theft case the exclusion genuinely applied and the complaint was not upheld), so an exclusion should be tested against the precise facts rather than assumed wrong. (3) Poor claims handling and delay: even when a decline is correct, the handling can breach the Fair Insurance Code and attract compensation; FSCL recommended an inconvenience payment where an insurer repeatedly asked for an itinerary it already had, and IFSO has found significant Code breaches for long delays, incomplete repairs and lack of transparency. The broker takeaway when a decline lands: check whether the relied-on term was unusual and properly disclosed at inception, whether the exclusion genuinely covers these facts on its wording, and whether the claim was handled promptly, fairly and transparently. Any "no" is a basis to push back. [VERIFY] FSCL case-study pages block automated fetching, so individual outcomes should be opened and read before being quoted as decided.
Source: Insurance & Financial Services Ombudsman - Fair Insurance Code breach case study (https://www.ifso.nz/case-studies/fair-insurance-code-breach) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
What "good conduct at claim time" looks like
Pulling the threads together, the schemes apply the Fair Insurance Code as the benchmark for claim-time conduct and reward a consistent set of behaviours. The concrete standards are: acknowledge a claim within 5 business days; decide accept or decline within 10 business days of having all the information needed; update the customer at least every 20 business days (or another agreed interval) until resolved; identify and respond to vulnerable customers; and handle the claim quickly, fairly and transparently. Good-conduct themes the schemes reward are asking clear questions up front, flagging unusual or onerous terms, not re-requesting information already provided, deciding promptly, communicating proactively, and apologising and remedying when the insurer gets it wrong. Poor-conduct themes the schemes penalise are duplicate information requests, drawn-out decisions, silence between updates, incomplete repairs and lack of transparency, which can attract inconvenience compensation even when the underlying decline is correct. For Bob, this is the operational definition of "treating customers fairly": clear questions at intake, plain explanations, prompt and transparent handling, and proactive communication when something goes wrong.
Source: Insurance & Financial Services Ombudsman - claim settlement delays guidance (https://www.ifso.nz/pages/claim-settlement-delays) · retrieved 2026-06-18 · rights: industry-code-public · drives: information · status: draft
Coming change: the Contracts of Insurance Act 2024 reframes the consumer's duty
The biggest forward-looking change is the Contracts of Insurance Act 2024, which received Royal Assent in November 2024 and is due to commence on a date (or dates) set by Order in Council, no later than 15 November 2027. Until then the existing duty of disclosure described above still governs, so this is a future change to flag rather than current law. For consumer insurance (contracts entered into wholly or predominantly for personal, domestic or household purposes), the Act replaces the proactive "duty of disclosure" with a narrower "duty to take reasonable care not to make a misrepresentation", judged by the standard of a reasonable policyholder adjusted for the actual policyholder's characteristics, and applying before the contract is entered into or varied, including at renewal. Crucially, the Act explicitly directs attention to how clear and specific the insurer's questions were, shifting more responsibility onto insurers to ask good questions rather than relying on consumers to volunteer the right facts. A dishonest misrepresentation is always treated as a failure to take reasonable care. The Act also codifies proportionate remedies: avoidance is only available if the insurer would not have offered cover on any terms, otherwise the insurer applies the different terms or premium it would have used, which formalises the proportionate approach IFSO already nudges insurers toward. The broker takeaway is to design clear, specific application questions now, because from late 2027 the consumer's obligation is only to take reasonable care in answering them.
Source: New Zealand Legislation - Contracts of Insurance Act 2024 (https://www.legislation.govt.nz/act/public/2024/46/en/latest/) · retrieved 2026-06-18 · rights: public-govt-attribution · drives: information · status: draft