Suncorp New Zealand (NZ) is supportive of any regulatory initiative that helps consumers understand insurance better and creates good customer outcomes, the insurer says.
The comments come after the government announced the terms of reference for the insurance contracts law review last week.
“We’re committed to engaging in the upcoming consultations to ensure that New Zealanders are able to effectively manage their risks with accessible, easy to understand and affordable insurance,” said a Suncorp NZ spokesperson.
Brett Wilson, co-founder of Insurtech company Cove and former chief financial officer at Tower, also welcomed the review of insurance contract laws. Cove has not launched to market yet – it is in the final stages of getting licensed.
“I think clearly where there’s multiple Acts of legislation that are dealing with one area of commerce, it’s a good idea if it’s all in one place,” he said. “I found as I worked through understanding the application of regulation process for Cove that we had to look at a bunch of different Acts, some of which were quite old. So, it was quite a challenge to bring it together.
“If you’ve got someone like the IMF pulling a finger at New Zealand and saying we’re behind the eight ball. That kind of message isn’t that helpful.
“When you listen to the comments by the supporters of the review, it’s all about placing the consumer first, and trying to make insurance understandable for the consumer and making it clear.
“But it is harder done than said. As we have done through drafting our policies - we have set out with a clear will to make our policy terms as clear and as easy as possible - but by the time you go through multiple reviews, you end up with a lot more disclosure than you feel is perhaps relevant.”
This occurs to the point that the full policy documents are so long and exacting that most consumers just don’t read them, Wilson said.
The review, which is being led by the Ministry of Business, Innovation and Employment (MBIE) will examine a range of issues within insurance contract law such as disclosure obligations for policyholders and gaps in New Zealand’s regulation of insurers’ conduct.
At present, there are six Acts governing insurance contracts, two of which date back to 1908. The review promises to modernise New Zealand’s insurance contracts law and consolidate it into one Act.
The review will also consider whether there’s a case for greater regulation and supervision of insurers’ conduct.
The proposed process has been outlined as follows:
Last week, the chief executives of ICNZ and IFSO both welcomed the move by the government to bring New Zealand in line with other comparable insurance markets.
