The High Court fined Tower (ASX:TWR, NZE:TWR) NZ$7 million in relation to an action brought by New Zealand's Financial Markets Authority regarding the insurer's misapplication of multi-policy discounts, totaling around NZ$11 million, relating to around 61,000 customers, according to Tuesday filings with both the Australian and New Zealand bourses.

The insurer self-reported the issue and made admissions of contraventions of the Financial Markets Conduct Act.

Tower said its multi-policy discount remediation program to compensate affected customers is nearing completion. On completion, it will have paid around NZ$12 million to affected customers, including interest. It also said it would remove the multi-policy discount from its insurance offerings and that it has made investments in improving its systems and processes.

The regulator and Tower agreed that these contraventions were the result of failures in systems and processes, not management decisions. Tower's responsible actions to address the breaches were acknowledged by the court, per the filing.

The NZ$7 million penalty was recommended to the court by both the firm and the regulator.

Its shares fell over 2% in recent trading on Tuesday on the Australian bourse.