New Zealand's Insurance Overhaul: Enhancing Consumer Protection and Industry Standards
New Zealand has modernized its insurance legislation with the Contracts of Insurance Bill and related amendments, introducing vital consumer protections and industry reforms. Commerce and Consumer Affairs Minister Andrew Bayly emphasized that the changes would provide fairer treatment for consumers, reduce ambiguity in disclosure requirements, and require insurers to draft policies in plain language and settle claims promptly.
A notable update places the onus on insurers to ask specific questions, sparing consumers the need to interpret vague terms about what might interest a “prudent insurer.” The legislation also includes provisions to regulate the use of genetic testing data by insurers if needed, ensuring that emerging technologies do not unfairly impact coverage options.
Insurance Council of New Zealand CEO Kris Faafoi welcomed the reform as a “long-overdue” measure that aligns New Zealand with global best practices, though he noted that insurers face significant adjustments over the next three years. The Council is committed to collaborating with government bodies to implement these changes effectively, supporting both consumers and the long-term stability of the insurance sector.
The legislation's full implementation promises a clearer, more secure insurance framework, bolstering consumer confidence and supporting economic resilience in New Zealand.
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