FMA senior-buyer disclosure rules for funeral cover

The CoFI regime

From 31 March 2025, NZ insurers (and other financial institutions) are subject to the Conduct of Financial Institutions (CoFI) regime enforced by the FMA. Under CoFI, every insurer must have a "fair conduct programme" — a documented plan for ensuring fair treatment of consumers across product design, distribution, claims, and complaints.

For funeral cover specifically — a product disproportionately sold to older NZ buyers — fair conduct means making sure the buyer understands what they're getting, what they're paying, and what they're not covered for.

Vulnerable-customer framing

The FMA explicitly recognises "vulnerable customers" in its CoFI guidance. Older buyers — particularly those with declining capacity, recent bereavement, or financial pressure — sit in the vulnerable-customer bucket. Insurers and advisers must:

• Adjust sales conversations to confirm understanding (not just rely on the buyer to ask questions)
• Avoid pressure tactics — limited-time discounts, "your premium goes up next week" framing
• Disclose alternatives — including not buying funeral cover at all if it doesn't suit
• Document capacity assessments where there are signs of cognitive decline

See the FMA's CoFI guidance materials for the underlying expectations.

Disclosure obligations under FAP licensing

Funeral cover is usually sold via Financial Advice Providers (FAPs) — either directly by the insurer (under an in-house FAP licence) or through independent advisers. Under the FMA disclosure regime, the adviser must give you:

• Public disclosure (publicly available) — who the FAP is, licence number, complaints process.
• Pre-advice disclosure (at first contact) — adviser's name, FAP name, what advice will and won't cover, fees and commissions, conflicts of interest.
• Advice disclosure (when advice is given) — specifics of the recommended product, commission ranges (typically 0% to 220% of the first year's premium upfront, 0% to 30% ongoing for personal insurance), and reasoning.
• Complaint disclosure (when complaining) — internal complaint process + external dispute scheme details.

EPOA + capacity issues

If the buyer has an Enduring Power of Attorney (EPOA) for property activated, the attorney can sign for funeral cover on their behalf — but the FMA expects insurers to confirm the EPOA's authority and ensure the buyer themselves understands the policy if they're cognitively able. Insurers cannot rely solely on the attorney's signature if the buyer is present and signs themselves while capacity is in doubt.

For families dealing with capacity decline, the practical question is whether the funeral cover is being bought to genuinely fund a funeral (legitimate) or as a way to move money out of the buyer's estate (which can raise elder-financial-abuse concerns under the Protection of Personal and Property Rights Act 1988).

Where to escalate

• Insurer's internal complaints process (mandatory)
• IFSO or FSCL — depending on the insurer's scheme membership
• FMA — for CoFI fair-conduct breaches or unlicensed advice
• Age Concern NZ — elder-abuse and financial-coercion concerns