Financial Markets Conduct (Conduct of Financial Institutions – Marac Insurance Limited) Exemption Notice 2025

The Financial Markets Conduct (Conduct of Financial Institutions – Marac Insurance Limited) Exemption Notice 2025, exempts Marac Insurance Limited (MIL), from the requirements under the Financial Markets Conduct Act 2013 (as amended by the Financial Markets (Conduct of Financial Institutions) Amendment Act 2022) (the Act) to:

1. be licensed as a financial institution; and
2. establish, implement, maintain, and comply with an effective fair conduct programme, and make information about the fair conduct programme available.

The exemption comes into force on 31 March 2025 and is revoked on the close of 31 December 2025.

The exemptions are subject to conditions to the effect that MIL:

• must not enter into any new contract of insurance;
• ensure that any claim received from a policyholder is handled in a manner that treats policyholders fairly; and
• give policyholders who make a claim information on the exemption, including how to make a claim or lodge a complaint, and contact details of its dispute resolution scheme. This information must also be published on its website.

The key reasons for granting the exemption (as set out in full in the Statement of Reasons in the Notice) are that –

• MIL has concluded its runoff with only one known remaining liability under a contract of insurance entered into with a consumer. There is a low probability of late claims or complaints under out-of-force contracts of insurance and MIL is engaging with the RBNZ in respect of the cancellation of its licence to carry on insurance business in New Zealand;
• in view of MIL’s limited consumer insurance business, the costs of becoming licensed and complying with fair conduct programme obligations under the FMC Act are likely to outweigh the benefits for consumers; and
• while the probability of late claims or complaints being made under out-of-force contracts of insurance is low, conditions of the Notice will require MIL to ensure that policyholders are treated fairly in relation to any claim or complaint made and that they are given information about the exemption and how to make a claim or complaint.

As such, the FMA is satisfied that —

• the granting of the exemption is desirable in order to promote the purposes of the Act, specifically to avoid unnecessary compliance costs; and
• the extent of the exemptions are not broader than reasonably necessary given that conditions that restrict MIL from entering into any new contracts of insurance and that the exemptions will only apply for a short period.

Download Financial Markets Conduct (Conduct of Financial Institutions – Marac Insurance Limited) Exemption Notice 2025