New Zealand boosts financial dispute compensation limits
New Zealand boosts financial dispute compensation limits | Insurance Business New Zealand
Insurance News
New Zealand boosts financial dispute compensation limits
Change aligns with standardisation of regulations for four dispute resolution services
Insurance News
By
Roxanne Libatique
New Zealand will see an increase in the financial limits for complaints managed by the four approved financial dispute resolution schemes, effective July 18.
This change aims to enable more consumers to resolve disputes without the need for court intervention.
Why is the government standardising regulations for financial dispute resolution services?
The government is standardising the regulations for the four financial dispute resolution services:
the Banking Ombudsman Scheme
the Insurance & Financial Services Ombudsman Scheme (IFSO Scheme)
Financial Services Complaints – a Financial Ombudsman Service
the Financial Dispute Resolution Service
The update will ensure consistent thresholds for complaint values and compensation across all services, thereby providing uniformity for consumers in the financial sector. These services are designed to offer free, impartial, and independent resolution of financial service complaints.
Increased compensation limits for insurance disputes in New Zealand
A key change involves raising the maximum compensation limit to $500,000 plus GST. Under previous rules, consumers with disputes over $350,000 plus GST (or $200,000 plus GST for the Financial Dispute Resolution Service) could not access free dispute resolution and had to seek court remedies.
The maximum compensation for non-financial loss, including stress and inconvenience, will also increase to $10,000 plus GST. The criteria for this compensation will be standardised among all four services.
The changes have been endorsed by the services, which believe that rule alignment will enhance and standardise access to independent dispute resolution. They see this development as a significant advancement in ensuring broader consumer access to fair and free dispute resolution.
IFSO Scheme gains high marks
In other news, the IFSO Scheme recently reported achieving high marks in fairness and professionalism.
According to an independent review, the scheme is highly regarded among New Zealand stakeholders for its professionalism, transparency, expertise, rigor, and balanced approach.
“Without exception, people spoke highly of the IFSO Scheme and its professionalism. Strengths and qualities of the IFSO Scheme that were frequently mentioned were: it acts professionally; is widely respected for its expertise, rigour, and balance; is approachable, transparent, and pragmatic in how it handles cases; and it works collaboratively with all stakeholders,” the review said.
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