Southern Cross Travel Insurance admits misleading discount claims, pays $1.1 million to Crown

Southern Cross Benefits Limited, trading as Southern Cross Travel Insurance (SCTI), has admitted breaching fair dealing laws and paid NZ$1,105,000 to the Crown following an investigation by New Zealand’s Financial Markets Authority (FMA).

The payment was made under an enforceable undertaking, in lieu of a pecuniary penalty, after SCTI acknowledged that it had made misleading representations regarding travel insurance discounts. The FMA found that SCTI had contravened sections 21 and 22(d), (f) and (h) of the Financial Markets Conduct Act 2013.

The investigation revealed that SCTI had promoted several discounts – for members of the Southern Cross Medical Care Society, for purchasing policies online, and for using certain promotional codes. However, while customers were led to believe these discounts applied to the entire premium, they were in fact only applied to the base premium. This was not clearly communicated.

According to the FMA, the total difference between what customers received and what they believed they were entitled to amounted to NZ$3.5 million.

Margot Gatland, FMA Head of Enforcement, stated: “This enforceable undertaking confirms that insurers are required to ensure representations they make to customers about potential discounts can be delivered, and that customers are treated fairly.

“We encourage people to check their insurance documents and complain if they are not paying the correct premiums.”

The FMA acknowledged SCTI’s cooperation with the investigation and confirmed that the insurer had since remediated all affected customers.

The case underscores the regulatory focus on transparent communication by insurers and fair treatment of consumers, particularly around promotional pricing and product disclosures.

Southern Cross Travel Insurance data from between May 2024 and April 2025 shows that travellers from Tasmania are the most likely to make a cruise-related claim.