Commerce and Consumer Affairs Minister Andrew Bayly has announced the introduction of the Contracts of Insurance Bill.
The bill aims to modernise the insurance industry to improve consumer protection and stabilise the insurance market.
“These reforms are long overdue. New Zealand’s insurance law is complicated and dated, some of which is more than 100 years old. The recent extreme weather events show just how important a well-functioning insurance system is, and it’s about time we brought insurance law into the 21st century,” Bayly said.
The bill, which had its first reading on May 2, aims to simplify insurance policies, making them more accessible to consumers.
“We have all heard stories of people being denied compensation because they didn’t realise they had to disclose certain information, or waiting months on end in limbo while they wait for a decision from their insurer. This isn’t fair or right,” Bayly said. “The bill makes a really positive change for consumers by shifting the onus of disclosure duties to insurers. Right now, consumers must disclose everything that might be relevant to an insurance policy. But it’s difficult for everyday Kiwis to know what information is relevant.”
Bayly also emphasised the importance of maintaining market stability, balancing consumer protection with insurance costs.
The bill’s passage is intended to streamline claims processing, reduce instances of claim denials, and provide peace of mind to consumers.
Bayly expressed confidence in passing the bill by the end of the year.
“I intend to pass this bill by the end of the year and look forward to the Select Committee process and submissions from the public,” he said.
Efforts to modernise insurance follows the Reserve Bank of New Zealand’s calls for enhanced risk management to maintain the stability of the financial system amid potential shocks.
