NEW ZEALAND Law and Practice Contributed by: Aaron Sherriff, Tanya Wood and Nick Laing, Duncan Cotterill
Duncan Cotterill Level 7 Duncan Cotterill House 50 Customhouse Quay Wellington 6011 New Zealand
Tel: +64 4 499 3280 Fax: +64 4 499 3308 Email: aaron.sherriff@duncancotterill.com Web: www.duncancotterill.com
1. Basis of Insurance and Reinsurance Law 1.1 Sources of Insurance and Reinsurance Law Historically, sources of insurance law in New Zealand come primarily from the law of contract, as well as from insurance principles at common law. Certain specific statutes apply to particular types of insur- ance (for example, the Life Insurance Act 1908 and the Marine Insurance Act 1908). Two other relevant statutes are the following. • The Insurance Law Reform Act 1977 (ILRA) applies to contracts of insurance. In summary, the Act: (a) regulates misstatements; (b) requires a link between a breach of policy terms and the loss before an insurer can rely on that breach; and (c) stipulates that an insurer can only rely on a time limit for notifying a claim where the insurer has been prejudiced by the late notification. • The Insurance Law Reform Act 1985 revoked the insurable interest requirement from policies, and regulates the sale of life insurance products to minors. Parliament recently passed the new Contracts of Insurance Act 2024 (CIA), which consolidates and modernises all of the existing law. The date that the new Act will come into effect is still to be determined.
Reinsurance contracts are generally regulated by the common law.
2. Regulation of Insurance and Reinsurance 2.1 Insurance and Reinsurance Regulatory Bodies and Legislative Guidance Insurance and reinsurance activity in New Zealand is regulated in terms of both conduct and prudential requirements. New Zealand’s Reserve Bank (RBNZ) regulates insurers and reinsurers carrying on insur- ance business in New Zealand. The Financial Markets Authority (FMA) monitors insurers in relation to the financial advice they give and investment products they sell (including policies of insurance). Conduct Requirements Conduct requirements are prescribed by the Financial Markets Conduct Act 2013, which regulates financial advisers providing financial advice relating to insur- ance policies. Advisers are required to register on the Financial Ser- vice Providers Register (FSPR); see the Financial Ser- vice Providers (Registration and Dispute Resolution) Act 2008. The FMA supervises the FSPR. Insurers providing services to retail customers must be members of an approved dispute resolution scheme. This does not apply to reinsurers.
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