Background

 

In June 1993, the Ministry of Consumer Affairs produced a study of insurance practices. It focused on consumers' experiences with their insurance transactions, industry practices which were considered undesirable and the identification of a need for self-regulation within the insurance industry.

At the same time, a recommendation was made by the government in its "Task Force Report on Private Provision for Retirement" to establish a single savings Ombudsman, to improve consumers' capacity to obtain redress in disputes with savings product providers.

The Retirement Income Act 1993 was enacted to enable the appointment of a Retirement Commissioner, whose statutory functions include the monitoring of the effectiveness of any private sector savings and investment Ombudsman (s.6(e)).

The trend in consumer law continued with the enactment of the Consumer Guarantees Act 1993. Relevant to the insurance industry, was the requirement for goods and services provided to consumers to be of certain standards and the remedies which were available when those standards were not met.

By 1994, there was agreement between the insurance and savings industry bodies that a single Ombudsman scheme should be set up, to provide a disputes resolution procedure for the insurance and savings industries.

The ISO Scheme was set up at the beginning of 1995.

In 2008, the Financial Service Providers (Registration and Dispute Resolution Act 2008 ("the Act") introduced a requirement for registered financial service providers to become members of an approved dispute resolution scheme as part of government initiatives to promote confidence in financial service providers.

In May 2010, the ISO Scheme became the second dispute resolution scheme to be approved under the Act.