“Thanks for the information, we are aware of the situation,” the FMA said in response to GoodReturn's questions, which included whether the regulator was investigating or if it planned to investigate.

“We generally do not comment on individual providers,” the FMA said.

Adviser Jon-Paul Hale of Willowgrove Consulting, Graeme Lindsay, who provides analysis to life and health insurance agents through his firm Strategy Financial Services and Russell Hutchinson of industry consulting firm Chatswood Consulting have all said they've only just become aware that the benefit, which previously covered non-surgical hospitalisations, had been dropped.

None of those complaining about the situation are saying Southern Cross didn't have a right to drop the benefit – the wording of the company's policies expressly allows it to do so – the issue is whether it adequately communicated the change.

As GoodReturns has already reported, Southern Cross provided GoodReturns with a link so we could verify the situation ourselves – normally such presentations are available to advisers only.

Just over an hour in to that presentation, Southern Cross does clearly state that the non-surgical hospitalisation benefit was being removed, but assured advisers their members would still be covered by other benefits.

It said it was removing it “to avoid confusion” that it said was occurring and the accompanying slide said that the changes would affect only about 25 of its members.

The company said the benefit was most often used for non-cancer IV infusions.

What Southern Cross failed to make clear in the presentation was that a $60,000 a year benefit was being replaced by a benefit worth $600 to $1,000 a year, depending on the type of policy, to cover non-cancer IV infusions.

GoodReturns has already reported that advisories sent to Southern Cross policyholders at the time focused on new benefits and talked about “changes” but nowhere did the company say the non-surgical hospitalisation benefit had been dropped.