NEW ZEALAND Trends and Developments Contributed by: Kiri Harkess, McElroys
that can be paid on a life policy without probate to NZD40,000. On 20 August 2025, the Resource Management (Con- senting and Other System Changes) Amendment Act 2025 received royal assent, increasing fines for envi- ronmental offences for individuals from NZD300,000 to NZD1 million and for corporates from NZD600,000 to NZD10 million. Infringement fees and fines for offences under the Resource Management Act are now uninsurable, aligning the Act with New Zealand’s Health and Safety at Work Act 2015 (HSWA). Statu- tory liability policies insuring against such liabilities are now unenforceable, though insureds retain the ben- efit of investigation and defence costs, and reparation covers. In the civil litigation sphere, the High Court (Improved Access to Civil Justice) Amendment Rules 2025 came into effect on 1 January 2026. These fundamentally change the approach to civil litigation in New Zea- land. Under the amended rules, proportionality is the overriding objective for the just resolution of any pro- ceeding: • there is a new general duty of co-operation on par- ties and solicitors; • the disclosure obligation has been narrowed; • disclosure and factual witness statements will be exchanged at an earlier stage; and • the courts will be providing more active judicial case management while emphasising alternative dispute resolution (ADR). This will increase upfront costs, but, if effective, insur- ers will benefit from earlier receipt of information and greater clarity about parties’ cases when defending litigated claims. In 2025, the Sixth National Government introduced several bills to parliament that will impact the insur- ance sector, and which are expected to progress through the legislative process in the coming year. • The Building (Earthquake-prone Buildings) Amend- ment Bill 2025 No 238-1 proposes to limit desig- nation of earthquake-prone buildings to high-risk building types in medium and high seismic zones
and to replace the rating system for earthquake- prone buildings with tiered mitigation requirements. • The Financial Markets Conduct Amendment Bill 2025 135-1 proposes to simplify and clarify mini- mum requirements for fair conduct programmes, provide for single licences, and give the FMA new powers, including on-site inspection powers. • The Financial Services Providers (Registration and Dispute Resolution) Amendment Bill 2025 No 136- 1 proposes to increase the independence require- ments for boards of approved dispute resolution providers (currently the Banking Ombudsman Scheme, the Insurance and Financial Services Ombudsman, Financial Services Complaints Ltd, and the Financial Dispute Resolution Service). Consolidation of the four approved schemes into a single-scheme model was considered and is supported by consumers, but is not part of the Bill. This may be revisited in the future. Other legislative reforms affecting insurers that are expected to be introduced in 2026 include the fol- lowing. • Prudential supervision: the Reserve Bank of New Zealand has announced amendments to the (Insur- ance Prudential Supervision) Act, changing licens- ing requirements for insurers and reinsurers, and increasing oversight and capital requirements for insurers operating in New Zealand. • A major change has been signalled for building law in New Zealand. The government is proposing to move from joint and several liability to proportion- ate liability for the building and construction sector. The government is also proposing to introduce mandatory home warranties for new builds and renovations as well as mandatory professional indemnity insurance for design and engineering professionals, and to increase disciplinary penal- ties for licensed building practitioners. This will have a significant impact on liability insurers for the building and construction sector, given the ongoing building defects litigation in New Zealand and the push for intensified residential development in New Zealand cities, particularly Auckland. • Changes to the HSWA have been proposed, to shift WorkSafe’s focus away from enforcing com- pliance to guidance, protect landowners providing
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