The NZ Government plans to review the country’s taxation rules for life insurance to give it greater parity with other financial products.

Finance Minister Michael Cullen says the life industry is an important industry in NZ, and with more than $NZ9 billion ($7.5 billion) in funds under management a review of life insurance tax is long overdue.

“The current rules have been operating in a largely unmodified form since 1990, even though the commercial, regulatory and savings environment has changed markedly over the last 16 years,” he said.

“The review will also look at whether life insurance should be included in the proposed rules for taxing portfolio investment entities, the subject of a bill currently before Parliament, to prevent it being disadvantaged relative to other savings vehicles.”

Dr Cullen says any changes emerging from the review will be included in a tax bill to be introduced next year.

He expects the industry – which will be consulted during the review process – to welcome the move.