Youi fined $100,000 by Insurance Council of New Zealand

Tuesday, 4 October 2016

'ICNZ sets high industry standards for all members to follow and Youi's business conduct has fallen well short of this expectation,' said Chris Black, president of the Insurance Council of New Zealand.

Insurer Youi has been fined $100,000 by the Insurance Council of New Zealand.

Youi was investigated by the Commerce Commission over allegations of making misleading statements to customers, and debiting their bank accounts without permission.

Danie Matthee, Youi chief executive, said: 'We have made some mistakes and acknowledge that even one is simply one too many.'

It pleaded guilty in the Auckland District Court to 15 charges brought by the Commerce Commission.

Now, the Insurance Council of New Zealand (ICNZ) has imposed its maximum fine on the South African insurer.

* Insurance Council to look into Youi behaviour

* Commerce Commission lays 15 charges against Youi

* Youi gets 'please explain' from Insurance Council after allegations**

ICNZ is the general insurance industry's lobbying association, and Youi is one of its members.

The fine is not the harshest penalty that could have been imposed.

Youi has been allowed to remain a member, but it has been warned that any future misconduct risks 'membership termination'.

The fine, which Youi has accepted, will be spent funding initiatives that improve consumers' financial capability, ICNZ's president Chris Black said.

'The board found Youi breached the ICNZ rule which specifically requires ICNZ members to conduct their business in accordance with the Fair Insurance Code and in a legal, honourable and proper manner,' Black said.

'ICNZ sets high industry standards for all members to follow and Youi's business conduct has fallen well short of this expectation.'

'Youi accepts that its actions are in breach of its membership obligations and have damaged the reputation of the industry,' he said.

Black said Youi had been allowed to remain an ICNZ member due to its unreserved apology to affected customers, its action in reviewing and changing its systems, processes and monitoring to prevent a recurrence, and its previous good behaviour.

Youi had also co-operated with the Commerce Commission's investigation, Black said.

Youi chief executive Danie Matthee said: 'We have made some mistakes and acknowledge that even one is simply one too many. I would like to apologise to every affected customer personally and provide each one with the assurance of our commitment to achieving only the best customer outcomes.'

He said Youi had over 50,000 policies in New Zealand.

'Unfortunately, we haven't got everything 100 per cent right and we found flaws in our customer service procedures,' he said. 'This includes charging a small percentage of customers for insurance policies when they only asked for quotes.'

Youi had audited its processes and systems, and changed the way it paid its sales people, he said.

'We've accepted and agreed with a fine imposed by the ICNZ and we support its efforts to fund improvements that enhance consumers' financial capability,' he said.

Youi recently launched a new TV advertising campaign called 'They Work for Youi' which focused on presenting its staff as trustworthy.

The advert said: 'They listen. They talk. They win. They lose. They help people. They help each other. They cry. They laugh. They work for Youi. They work for you. Call them. Youi, we get you.'