Clare Bolingford, the FMA’s director of banking and insurance acknowledged that Finance Minister Grant Robertson had written to Richard Klipin, Tim Grafton and Roger Styles already, encouraging the industry to continue to support customers.

She said the FMA was pleased to see insurers responding to customer needs for support so far.

“Our expectation is that insurers remain cognisant of the challenges faced by New Zealanders, continue to offer support and flexibility to assist policyholders and do what is possible to maintain or reduce costs for consumers at this time.”

She said the FMA wanted to see proactive behaviour, such as using media to publicise the relief offers available, use of call centres to contact elderly customers to check on them, resilience and vulnerability training for those distributing product, reduction or refund of premiums when claims are lower than planned, and additional support to those currently on claim.

“As previously set out in our letter to CEO’s on April 17 we expect insurers to address changing circumstances of all customers and maintain proactive and regular communications with them.”

She said insurers would need to make sure that all offers of financial help, such as cover suspension or payment holidays, were clearly explained to advisers and clients and that the potential implications – such as if someone could not claim during that period – were clearly explained.

They would also need to communicate any Covid-19 policy exclusions and treat customers fairly when changes were made.

Bolingford said they should also have systems in place to ensure claims are processed efficiently during the current disruption including considering how hard it was for clients to access medical approvals and assessments.

Premium increases above CPI should come with additional advanced warning with options for those facing affordability pressure.

“Ensure that you and your distributors maintain acceptable advertising standards during Covid-19. As an example, not using Covid-19 as a customer acquisition tool. Along with the other members of the Council of Financial Regulators we will continue to actively monitor the insurance sector, in particular how companies are responding to customer needs at this time. We encourage you and your members to work together to identify and share best practice.”

Spokesman Andrew Park said advisers should be aware of how insurers were responding to the pandemic.

“There’s a key role for advisers to help their clients with decisions when they are being offered premium suspensions or alterations to policies.”