Youi has been fined a maximum $NZ100,000 ($94,176) by the Insurance Council of New Zealand (ICNZ) and risks expulsion if it again fails to meet best-practice standards.

The South African-owned insurer has pleaded guilty in court to 15 sales misconduct charges filed by the Commerce Commission. The matter is still before the Auckland District Court.

The charges include making false sales pitches and taking unauthorised direct debits from the credit cards of people who called for policy quotes.

“ICNZ sets high industry standards for all members to follow and Youi’s business conduct has fallen well short of this expectation,” the industry body’s President Chris Black said.

“The board of ICNZ considered the most severe sanction it could impose – termination of Youi’s membership of ICNZ – but decided on a severe reprimand, the maximum financial penalty allowable and a warning that a recurrence would lead to termination.”

Youi admits its behaviour has hurt the industry and says it has acted to strengthen its compliance system and customer service.

“We have made some mistakes and acknowledge that even one is simply one too many,” CEO Danie Matthee said.

“We also look forward to continuing our contribution to the workings of ICNZ and affirm our commitment to its efforts and to the principles of the Fair Insurance Code.”

Youi faces similar allegations in Australia but denies whistleblower claims it billed potential customers for policies they never took out and manipulated client data to reject claims.

The Australian Securities and Investments Commission (ASIC) began “making enquiries” when the whistleblower accounts surfaced in August.

ASIC declined to comment on its progress when contacted by insuranceNEWS.com.au.

A Youi spokesman says the insurer is co-operating with the regulatory authorities, including the Australian Prudential Regulation Authority.

“I also confirm there is no formal investigation under way by ASIC,” the spokesman told insuranceNEWS.com.au.

“However, we are co-operating with our regulators, particularly ASIC and APRA, with any enquiries they have in relation to recent media articles.”

Owned by Outsurance Holdings, Youi began operations in Australia in 2008 and expanded to New Zealand in 2014.