Call for All Life Insurance Contracts to be Consumer Contracts

Finance Advice New Zealand (FANZ) is urging the government to classify all life, health, and disability policies as consumer contracts. Addressing parliament's Finance and Expenditure Committee on the Contracts of Insurance Bill, FANZ CEO Nick Hakes highlighted that New Zealand's 450,000 small businesses often need insurance for both personal and business reasons. Hakes warned that the bill’s current definitions could create varying disclosure obligations for personal versus business policies, adding complexity for consumers.

FANZ's submission pointed out that only 51.3% of New Zealanders have life insurance, below the OECD average of 68.7%. FANZ argues that simplifying disclosure requirements would build consumer trust and increase insurance uptake. Hakes emphasized that the current bill could confuse policyholders and complicate the insurance application process, contrary to the bill’s objectives.

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