Insurance contract law review

The draft law is also a relatively quick read at only 83 pages. Possibly the most interesting thing about this document is the case for government intervention over self-regulation. The Regulatory Impact Assessment is a bit dismissive of industry attempts to self-regulate:

“Given the multitude of players in the industry, it is not reasonable to expect all players to comply with certain voluntary standards without government intervention The characteristics of insurance products and services mean that some underlying issues such as information asymmetry, conflicts of interest and an imbalance of power exist. While voluntary initiatives are welcome, we do not think that they are an adequate substitute for clear laws on the contract between the insurer and policyholder”

In the same document the summary of existing legislation that governs insurance contract law highlights just how long it has been since work was done in this area. New Zealand’s existing insurance contract-related statutes are:

• the Marine Insurance Act 1908
• the Life Insurance Act 1908
• the Law Reform Act 1936
• the Insurance Law Reform Act 1977
• the Insurance Law reform Act 1985
• the Insurance Intermediaries Act 1994