Financial Markets Conduct (Conduct of Financial Institutions — The New India Assurance Company Limited) Exemption Notice 2024

The Financial Markets Conduct (Conduct of Financial Institutions — The New India Assurance Company Limited) Exemption Notice 2024 (Notice) exempts The New India Assurance Company Limited (NIA) 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.

The Notice comes into force on 31 March 2025. 

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

1. NIA must not provide insurance to consumers other than its employees and can only provide general insurance to those employees; and
2. NIA must:
   1. give its employees information about the exemptions and warn them that fewer consumer protections apply to their insurance; and
   2. provide its employees with information about how to make complaints; and
3. NIA must report to the FMA annually on the insurance provided to its employees and any complaints and notify the FMA if there is a material change to the number of its employees.

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

• where NIA has a very small number of consumer insurance contracts with some of its few employees in New Zealand, the costs of being licensed and complying with the duties to establish, implement, maintain, and comply with an effective fair conduct programme to meet the fair conduct principle under the Act are likely to outweigh the benefits:
• NIA will be required to inform its employees about the exemptions and warn them that the usual fairness protections provided by the Act will not apply. This, along with the information available through their position as employees of NIA will allow them to make an informed decision about whether to have their general insurance with NIA or with a different licensed financial institution, noting that the general insurance is only entered into for one-year periods.
• as such, the FMA is satisfied that the exemptions are desirable to promote the confident and informed participation of businesses, and consumers in the financial markets and to avoid unnecessary compliance costs.  Given their limited application, the exemptions are not broader than reasonably necessary.

Download Financial Markets Conduct (Conduct of Financial Institutions — The New India Assurance Company Limited) Exemption Notice 2024