Insurance advisor reprimanded for misleading Covid-19 advertising

Tuesday, 7 April 2020

WeChat is a Chinese language social media platform routinely used by businesses to advertise their services.

An insurance advisor telling Chinese New Zealanders they needed health insurance to pay for treatment should they catch Covid-19 has earned the wrath of the Financial Markets Authority.

The regulator called the advisor's claims 'misleading', saying emergency treatment for Covid-19 was provided free under New Zealand's health system.

The claims were made by the insurance advisor, who is registered on the Financial Service Providers Register, on the Chinese language social media platform WeChat.

'The posts, written like news articles, cited costs for Covid-19 hospitalisations in China - supposedly up to $250,000 - before recommending people living in New Zealand get health insurance to avoid the same financial risk, especially young children and the elderly,' said FMA director of regulation, Liam Mason.

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''After being tipped off by a concerned party, the FMA contacted the adviser's office and they agreed to remove the Covid-19 advertorials,' said Liam Mason director of regulation at the Financial Markets Authority.

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The 'advertorials' failed to mention that in New Zealand, emergency treatment and testing for Covid-19 is free, as it is covered by the public health system, Mason said.

'The Ministry of Health says anyone with an infectious disease is eligible for publicly-funded health services. Citizenship and immigration status are not relevant, nor is their length of stay in New Zealand,' he said.

The FMA contacted the insurance advisor, and he removed the misleading advertorials.

'After being tipped off by a concerned party, the FMA contacted the adviser's office and they agreed to remove the Covid-19 advertorials. The FMA is following up with the advice firm in question,' Mason said.

The regulator had chosen not to name the insurance advisor.

Advice from health insurers on Covid-19 is clear.

Giant not-for-profit health insurer Southern Cross Health Society, which covers around 870,000 people, said: 'If you need acute care for Covid-19, it will be provided in a public hospital for free and is not covered by your private health insurance.

'Testing for Covid-19 is provided at no cost through the public health system and can't be accessed privately. All the information you need from the Government is on this Covid-19 website.'

Smaller for-profit health insurer NIB said: 'The Ministry of Health will cover the cost of your hospitalisation if you are admitted to public hospital with Covid-19.'

Whether intentional or not, the posts would have misled readers into believing they need insurance for Covid-19 testing and urgent treatment, when they didn't, Mason said.

'All advisers, in particular registered financial advisers, need to remember their fair-dealing obligations under the Financial Markets Conduct Act,' he said. 'These provisions prohibit misleading or deceptive conduct, including false or misleading advertisements.

'The FMA will not tolerate behaviour from firms or individuals that appears to exploit the Covid-19 disruption, or conduct that preys on people who may be feeling additional stress at this time.

'We will take any steps necessary to stop this kind of behaviour and hold those responsible to account.'

Anyone with information about suspicious offers of insurance or investments related to Covid-19 are urged to call the FMA on 0800 434 566 or email questions@fma.govt.nz.