Former NZ Attorney-General and Justice Minister Jim McLay doesn’t believe the country’s insurance industry needs regulating. Speaking last week at the official launch of the new Insurance Brokers Association of New Zealand (IBANZ), he said the industry is “capable of looking after themselves”.

IBANZ merges the Corporation of Insurance Brokers of New Zealand and the Independent Insurance Brokers Association. It has about 2000 members.

Mr McLay says it usually costs as much to regulate a market of 4 million people in New Zealand as it does to regulate an Australian-sized market of 20 million.

In his six years as Attorney-General and Justice Minister he often found himself as the “lightning rod” for special interest groups who believed industries should be subject to licensing and regulation.

“Some of these interests never gave up, and we now do have regulation, or proposed regulation, in some of those areas.”

Mr McLay says Australia’s “heavy-handed” regulatory approach didn’t stop the failure of HIH or problems that emerged in the reinsurance sector.

“By comparison, in New Zealand with our very light-handed approach, we haven’t had a collapse since that of Standard Insurance in 1960 – 45 years ago,” he said. “Against that background, I seriously question whether there is a need for anything other than self-regulation of your own industry.”