Insurance contract law review

The purpose of the review

The review's purpose was to ensure New Zealand’s insurance contract law is facilitating insurance markets that work well and enable individuals and businesses to effectively protect themselves against risk.

Insurance plays an important role in the lives of New Zealanders, helping them cope with unforeseen life events and providing business with greater certainty. A well-functioning insurance system is integral to ensuring consumers, businesses and insurers can transact with confidence in a fair, efficient and transparent way and that insurance continues to serve all New Zealanders well.(external link)

Legislative changes

On 15 November, the Contracts of Insurance Bill 2024 and Contracts of Insurance (Repeals and Amendment) Act 2024 implementing changes from the review became law.

The changes will take effect at dates set by Order in Council, and no later than 3 years after the Act passing into law. We are currently working on timing details and on developing regulations to support the changes.

Read the press release:

Safeguarding Kiwis with modern insurance law(external link) — Beehive.govt.nz

Read the Contracts of Insurance Act 2024 and Contracts of Insurance (Repeals and Amendments) Act 2024:

Contracts of Insurance Act 2024(external link) — New Zealand Legislation

Contracts of Insurance (Repeals and Amendments) Act 2024(external link) — New Zealand Legislation

Contracts of Insurance Bill introduction

On 2 May 2024, the Contracts of Insurance Bill had its first reading.

Read the press release:

Modern insurance law will protect Kiwi households(external link) — Beehive.govt.nz

Read the Contracts of Insurance Bill:

Contracts of Insurance Bill(external link) — New Zealand Legislation

Policy decisions

In November 2019 and April 2024, the Government agreed a series of reforms to insurance contract law, including:

• Placing the responsibility on insurers to ask consumers the right questions when processing new insurance policies, rather than leaving it to consumers to know what to tell their insurer.

• Requiring insurance policies to be written and presented clearly, so that consumers can easily understand them.

• Ensuring insurers respond proportionately when consumers don’t disclose something they should have, or misrepresent themselves.

• Removing insurance-specific exceptions from the unfair contract terms provisions in the Fair Trading Act 1986 and instead clarifying which insurance terms are part of the “main subject matter” of the contract (which cannot be declared unfair).

• Providing transparency and certainty by requiring that insurers must pay out on claims within a reasonable time.

• Extending powers to the Financial Markets Authority to monitor and enforce compliance with new requirements.

Previous consultation

The Minister of Commerce and Consumer Affairs previously released an issues paper, options paper, and exposure draft for public consultation.

Issues paper consultation

Options paper consultation

Exposure draft consultation