Government to review insurance contract law
The Ministry of Business, Innovation and Employment (MBIE) has announced plans to conduct a review of insurance contract law in mid-2018.
In a statement released on 6 March 2018 MBIE, who will be responsible for undertaking the review, expressed concerns that New Zealand’s current insurance contract law is antiquated and fragmented, and in need of evaluation.
Scope of the review
MBIE has identified the following specific issues for consideration as part of the review process:
– Disclosure obligations for policy holders and remedies for non-disclosure;
– Technical issues identified by the Law Commission and broader insurance industry;
– Regulation of insurers’ and insurance intermediaries’ conduct;
– Application of “unfair contract terms” to insurance contracts; and
– The ability for consumers to find and compare prices and policies.
The review process
MBIE has stated it intends to engage with stakeholders as part of the review process and accordingly will prepare an issues paper for public consultation in mid-2018 and a subsequent options paper expected in late-2018. At this stage it is anticipated any policy decisions and consequent legislative change (if any) would take place in mid-2019.
New Zealand’s current insurance contract law may be said to be lagging behind when compared with similar insurance markets such as the UK and Australia where reviews have already resulted in modernisation of the legal framework.
Currently New Zealand’s insurance contract law is governed by six statutes. Consolidation of existing legislation will assist in providing clarity to both policy holders and insurers and make regulation of the insurance market more efficient.
The issues that have been identified for review suggest a shift towards greater protection of consumers in the insurance market. Following the Canterbury Earthquakes there has been increasing public concern that the current insurance framework is flawed and in need of reform. It is likely this has been a significant factor in prompting the proposed review.
If you need any further information about insurance contract law, or would like advice on how to be involved with the review process, please do not hesitate to contact us.
Want to know more?
If you have any questions about the upcoming review or insurance contract law generally, please contact our specialist Insurance Team
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