NZ law requires every registered financial-services provider — including every licensed life insurer and every Financial Advice Provider — to belong to an external dispute resolution (EDR) scheme. The two approved schemes that cover most life insurers are IFSO and FSCL. Both schemes are free to consumers and binding on the provider up to a defined dollar threshold.
The two schemes
- IFSO — Insurance & Financial Services Ombudsman. Established 1995. Membership at ifso.nz/about-us/members.
- FSCL — Financial Services Complaints Limited. Established 2010. Membership at fscl.org.nz/find-a-member.
Every insurer nominates one of these schemes at the point of registration — check the insurer's website footer or policy document for which scheme applies.
The complaint pathway, step by step
- Raise the complaint with the insurer first. Use the insurer's internal complaints process. The insurer must respond and attempt resolution. By law most insurers must resolve or finalise their internal investigation within a defined window.
- If the insurer issues a "deadlock" letter (or two months pass without resolution), you can escalate to whichever EDR scheme the insurer belongs to. The deadlock letter from the insurer is the trigger to go external.
- Lodge with IFSO or FSCL. Both schemes have online lodgement forms; both are free to consumers. Provide the policy details, the complaint, the insurer's deadlock letter, and any supporting documentation.
- Scheme investigation. The scheme will gather information from both parties and may attempt mediation before issuing a determination. Both schemes publish anonymised case studies.
- Determination. If the scheme finds in the consumer's favour, the insurer is bound by the decision up to the scheme's dollar cap. Beyond the cap, you retain the right to pursue the matter through the courts.
When to involve the FMA
IFSO and FSCL resolve individual complaints. The Financial Markets Authority is the conduct regulator for the industry — it doesn't resolve individual claims but does take supervisory action against insurers showing systemic conduct issues. If your complaint suggests a pattern (rather than an isolated case), an FMA report can be made via fma.govt.nz/contact/report-a-concern.
Non-disclosure complaints — a common scenario
A frequent cause of declined life claims is alleged non-disclosure at application — the insurer says the policyholder failed to disclose a material health condition or history. Both IFSO and FSCL determinations often turn on:
- What questions the insurer actually asked at application.
- How the questions were worded (clear vs ambiguous).
- What the policyholder reasonably understood the question to mean.
- Whether the undisclosed information actually mattered to the underwriting decision.
Recent FMA guidance and CoFI rules sharpen the insurer's duty to ask clear, specific questions. See our non-disclosure clause matrix for the wording each NZ insurer uses.
Sources
- IFSO — Insurance & Financial Services Ombudsman: ifso.nz
- FSCL — Financial Services Complaints Limited: fscl.org.nz
- FMA — Report a concern: fma.govt.nz/contact/report-a-concern
- FSPR — Financial Service Providers Register (confirms an insurer's EDR scheme): fsp-register.companiesoffice.govt.nz