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Insurance Law Reform Act 1977


  • The insurance industry in New Zealand is similar with many other countries like Australia and the United States of America. There are a number of Acts governing insurance companies. In New Zealand, insurance companies don’t need to register or obtain a license to practice. But they need to pay deposit, and in most cases, obtain a formal claims paying rating from an approved agency. All of these obligations are set out in the legislation.
     

    Insurance Law Reform Act 1977

     
     There are two important pieces of legislation – the Insurance Law Reform Act 1977 and the Insurance Law Reform Act 1985. These acts govern the conduct of insurance companies in relation to many aspects of claims and policies. These Acts have been passed to prevent insurance companies from acting unreasonably. For example: Sections 5 and 6 – Insurance Law Reform Act 1977 limit the circumstances in which an insurance company can avoid a policy on the basis of a misstatement of the application or renewal; Sections 6 and 7 - Insurance Law Reform Act 1985 limit the circumstances in which insurance companies can refuse to pay a claim on the grounds of what is called “insurable interest”’;Section 9 – Insurance Law Reform Act 1977 limits the circumstances in which an insurance company can decline a claim for late notice; Section 11 – Insurance Law Reform Act 1977 places strict limitations on the circumstances on which an insurance company can enforce an exclusion. Insurance companies cannot decline a claim in reliance on an exclusion if the insured person can prove that the circumstances falling within the exclusion did not cause or contribute to the loss;Section 66 - Insurance Law Reform Act 1985 places restrictions on the sale of life insurance to minors. 
    Nowadays, New Zealand’s insurance market has been growing, although the rate of expansion has been slowing. This reflects challenging economic conditions. Economic growth turned positive in mid-2010, but recovery is still modest and uneven. 

    Insurance Law Reform Act 1977