Insurance contract law reform back on the agenda for 2018

Bell Gully | View firm profile

The Government announced on 6 March that it is undertaking a review of New Zealand's insurance contract law, and has released a terms of reference for the review here​​.


A review of New Zealand's insurance contract law has been proposed a number of times, including by the Law Commission in 1998, by Cabinet in 2007 and by the former Minister of Commerce and Consumer Affairs last year. 

What issues will be considered?

The review, which is being led by the Ministry of Business Innovation and Employment (MBIE), will address a number of insurance law issues, many of which have been the subject to reform in the United Kingdom and Australia in recent years.

The focus of the review will include:


  • disclosure obligations for policyholders and remedies for non-disclosure;
  • a range of technical issues previously identified by the Law Commission and insurance industry;
  • areas identified by the International Monetary Fund's Financial Sector Assessment Programme in May 2017 relating to gaps in the conduct regulation of insurers and intermediaries;
  • terms defined to be not "unfair contract terms" under the Fair Trading Act 1986; and
  • the ability for consumers to find and compare prices and policies.


The review will cover all types of insurance.

What areas are excluded from the review?

The Government has specifically excluded the following areas from the scope of the review:


  • underinsurance;
  • any competition issues related to the structure of the insurance market;
  • the prudential regulation of insurers (which is being considered by the Reserve Bank in its review of the Insurance (Prudential Supervision) Act 2010);
  • earthquake insurance as governed by the Earthquake Commission Act 1993 and accident compensation insurance as governed by the Accident Compensation Act 2001; and
  • the regulation of financial advisers, and the dispute resolution regime in relation to insurance.


How can you get involved?

MBIE is preparing an Issues Paper which it plans to release for public consultation in mid-2018. The issues paper will be an opportunity for interested parties to share their views and insights about the issues that have been identified for the review. This will be followed in late-2018 with a proposed consultation on an Options Paper, following which the Government expects to be in a position to confirm policy decisions on the review and, if warranted, initiate a legislative process for reform.

Bell Gully will continue to monitor the progress of the review. If you would like assistance with making submissions to MBIE during the review process, please contact us or your usual Bell Gully adviser.

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