12. Question No. 12—Commerce and Consumer AffairsANNA LORCK (Labour—Tukituki) to the Minister of Commerce and Consumer AffairsQuestion No. 12—Commerce and Consumer Affairs12. ANNA LORCK (Labour—Tukituki) to the Minister of Commerce and Consumer Affairs: What benefits have New Zealanders gained from the Financial Markets (Conduct of Institutions) Amendment Act 2022?Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you Mr Speaker. New Zealanders can be confident today that their banks and insurance companies are obliged to treat them fairly and will face consequences if they don't—Andrew Bayly: They already have that under the other legislation.Hon Dr DUNCAN WEBB: —thanks to this vital legislation Mr Bayly. Since coming into office the Labour Government has shone a light on the conduct of banks and insurers through conduct reviews through court cases and through the establishment of the conduct of financial institutions (CoFI) Act. We have put the onus on banks and insurers to demonstrate that they put the needs of consumers at the forefront of decisions and we have given the Financial Markets Authority (FMA) essential new powers to hold institutions that treat customers unfairly to account with significant new penalties. This Government's work on fair conduct is already seeing hundreds of millions of dollars returned to Kiwi consumers by their banks and insurers and those responsible for unfair treatment are already being discovered and held to account. Everyone on this side of the House should be proud of this fantastic piece of Government legislation.Anna Lorck: What led to the Government establishing this legislation?Hon Dr DUNCAN WEBB: Thank you. The FMA and the Reserve Bank reviewed the conduct of banks and life insurers in 2018 and 2019. Since that time a whopping $161300000 has been returned to over 1.5 million Kiwis. In the words of the Executive Director for Regulatory Delivery at the FMA this demonstrates the extent of the [weakness] in the systems and processes across banks and life insurers." and "the significant amount of work required by financial institutions to ensure they are identifying rectifying and remediating issues". The enormous impact of poor bank and insurer conduct on customers is irrefutable and that's why this Government took action.Anna Lorck: What other evidence is there that the conduct of financial institutions Act is necessary?Hon Dr DUNCAN WEBB: The FMA has taken seven of New Zealand's big-brand insurers and banks to court for fair dealing breaches and has seen multimillion-dollar penalties handed down to several of these institutions.Andrew Bayly: But they didn't do that under CoFI—they did it under existing regulation.Hon Dr DUNCAN WEBB: Mr Bayly without this Government's amendment Act passed last year the FMA can only act retrospectively once harm to those customers has already been done. There is overwhelming evidence that a proactive fair conduct regime with powers to monitor licence and enforce is sorely needed the likes of which only the conduct of financial institutions Act provides.Anna Lorck: Do you have plans to roll back this legislation further?Hon Dr DUNCAN WEBB: Absolutely not. This Government takes its responsibility for ensuring New Zealanders are protected by our laws—we're in it for the Kiwi customers who rely on us to make sure their banks and insurers treat them fairly. Where that's not happening we will act. We are proud of this critical piece of legislation and on this side of the House we've no plans to repeal it. I agree with Hamish McNicol and Calida Stuart-Menteath who said in the National Business Review on 18 August that "Ditching CoFI is bonkers"."