New Zealand’s Tower will remove multipolicy discounts from its insurance offers, saying the complexity of accurately assessing them “means there is still a risk of error”.

For two decades, the insurer has offered discounts for customers with two or more eligible policies.

But it hit trouble in March last year when the Financial Markets Authority filed civil proceedings alleging it misled customers across 81,200 policies, resulting in about $NZ9.5 million ($8.86 million) of overcharges.

“These failures were due to fundamental flaws in Tower’s IT systems and a lack of adequate controls,” the regulator said.

CEO Paul Johnston says Tower is committed to fair and competitive pricing but will drop multipolicy discounts.

“This level of risk falls short of the high standards Tower has set for delivering excellent customer experiences and is unacceptable for meeting regulatory requirements,” he said.