New Zealand has passed laws designed to provide better consumer protections, such as requiring insurers to ask the “right questions” and write policies in plain English. 

The Insurance Council of New Zealand backs the Contracts of Insurance Bill and says the industry is working to be ready for its introduction in three years.

“The new legislation tidies up New Zealand’s mishmash of outdated insurance laws into a single framework to support well-functioning insurance markets,” council CEO Kris Faafoi said.

“It’s long overdue and will benefit consumers and insurers. We are focused on getting on with the job and ensuring there is clarity and certainty for consumers and insurer parties for the long-term.”

He says the industry will “work closely with the government and regulators to ensure the new legislation and other regulatory reforms the industry is facing are done in a co-ordinated way with realistic time frames”.

Commerce and Consumer Affairs Minister Andrew Bayly says the reform means consumers “will no longer have to rack their brains and guess what information is relevant to their insurance policy.

“Under the outdated existing law, consumers must disclose any information that might influence a ‘prudent insurer’ – a term that is poorly understood by consumers and has led to insurers voiding claims when consumers accidentally or unknowingly fail to disclose information.

“Now, the onus is on insurers to ask the right questions and consumers must simply provide honest answers.”