Hon Andrew Bayly
Minister of Commerce and Consumer Affairs

Modernised insurance law will provide Kiwis with confidence that they will be treated fairly by insurance providers, Commerce and Consumer Affairs Minister Andrew Bayly says.

“A secure insurance market is integral to New Zealand’s economic success. It enables consumers and businesses to access finance and gives them the assurance to grow and invest,” Mr Bayly says.

“The Contracts of Insurance Bill and the Contracts of Insurance (Repeals and Amendments) Bill, which passed third reading today, provides consumers with significant new safeguards.

“Importantly, 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“Under the outdated existing law, consumers must disclose any information that might influence a ‘prudent insurer’ - a term that is poorly understood by consumers and has led to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.

“This and other changes, such as requirements for insurers to write policies in plain language and pay claims within a reasonable time, improves the fairness and clarity of our insurance law.

“Following select committee submissions, the Bill has been updated to safeguard Kiwis’ access to life and health insurance if they have taken a genetic test.

“Genetic testing is a valuable, emerging technology that can unlock significant health and productivity benefits. However, there are international examples of insurers limiting cover, or increasing premiums, due to genetic testing results.

“While we don’t believe this is happening regularly in New Zealand now, the Bill includes provisions which mean the Government can, if needed in the future, regulate the use of genetic testing results by insurers.

"This change brings New Zealand closer in step with our partners. Canada has laws stopping insurers from seeing genetic test information, and recently Australia announced it will ban life insurers from using genetic test results.

“Thorough consultation has ensured that this Bill balances consumer protection with providing certainty for the market. I am delighted that we have delivered on a Q4 promise and ensured the viability of a fair and well-functioning insurance market.”

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