Regulatory Impact Analysis Statement, link: www.mbie.govt.nz/dmsdocument/7480-impact-statement-insurance-contract-law-reforms-proactiverelease-pdf During the period referred to in subsection (1), every insurance policy of the vendor in respect of damage to or destruction of any part of the property or household exists in respect of the land and furniture that has been agreed to be sold and to the extent that the buyer is not entitled, compensation or restoration of such lands. and such furniture under another insurance policy for the benefit of the buyer and seller. This Act may be referred to as the Insurance Law Reform Act, 1985. Transport insurance is treated as a separate subset of insurance law and is subject to the Marine Insurance Act 1908. In New Zealand, there is no corresponding code for insurance other than transport. However, there are a number of laws relating to the conditions of insurance other than transport, including the Life Insurance Act 1908, the Insurance Law Reform Acts 1977 and 1985 and the Fair Trading Act 1986 (FTA). Reform of these laws is proposed as part of the proposed general review of insurance contract law in New Zealand. An insurance contract generally requires an insurance clause and must specify the property or liability to be insured, as well as the extent of compensation. This information is usually presented in the insurance plan (which contains specific information about the respective insured) and in the contract text (which provides further details on the type and extent of insurance coverage, as well as damage conditions and other relevant provisions for insurance). Members of the Insurance Council of New Zealand (ICNZ) are also committed to the Fair Insurance Code.
ICNZ currently has 30 members and three associate members. The Code establishes a minimum standard for services to insurers, describes responsibilities between insurer and insured, and promotes professionalism in the insurance industry. The public submitted contributions to the updated Code in 2019, and updates are expected to be implemented in 2020. Insurance policies in New Zealand usually include explicit requirements for prompt notification to the insurer. However, where an insurance contract provides for a time limit within which a claim must be made, this period only applies if the insurer has been affected by the insurer`s delay (and does not link the time limits for reporting after death in life insurance policies). Unless otherwise provided for in the Directive, there is no specific form in which termination must take place. This is a reprint of the Insurance Law Reform Act 1985. The reprint contains all amendments made to the Act as of January 1, 2008, as set out in the list of amendments at the end of these notes. On Thursday, the Ministry of Business, Innovation and Employment (MBIE) released a consultation paper and a draft law on insurance contracts (Bill).1 The bill aims to reform, consolidate and modernize existing insurance legislation into a single act. It concerns the rights of insurers and policyholders under all insurance and reinsurance contracts concluded after its entry into force, as well as insurance intermediaries and brokers. Our previous update on MBIE`s reform can be found here. Brokers generally act as intermediaries for the insured.
However, following the legislative reform of the Insurance Law Reform Act 1977, a person acting during the negotiation phase within the limits of his or her actual or apparent powers on behalf of the insurer remains a representative of the insurer throughout the process. Subsequently, before the adoption of the insurance proposal, the insurer is credited with the notification of all matters important to the insurance contract that are known to the representative concerned in the negotiations. Under the Law Reform Act 1936, any insurance available to satisfy the obligation to pay damages or compensation will be charged to the plaintiff (up to the amount of the claim, subject only to the insurance limit) from the time of the event giving rise to the claim. The courts have held that costs have the effect of preventing an insurer from advancing defence costs to the insured if it reduces the amount of insurance proceeds subject to the charge. All or part of the amount payable in respect of damage or destruction under the insurance policy taken out by the seller is payable to a mortgagee or to a person who makes claims through the seller. The Companies Act 1993 imposes restrictions on a company`s ability to take out insurance for its directors and employees (and those of its subsidiaries). A company must be approved by its articles of association and have the prior approval of its board of directors before taking out insurance. A company cannot take out insurance for its directors and employees with respect to criminal liability (e.g.
fines) or defence costs related to criminal proceedings unless the director or employee is acquitted. Directors who vote in favour of underwriting insurance must certify that the cost of insurance is fair to the corporation. The Insurance Law Reform Act 1977 limits an insurer`s ability to evade a policy on the basis of false information provided by the insured or to refuse a claim on the basis of certain types of exclusions or by failing to meet time limits for making a claim. It also provides that arbitration clauses in insurance contracts (with the exception of those concluded by the insured in trade) are not binding on the insured. 1 www.mbie.govt.nz/have-your-say/consultation-on-exposure-draft-insurance-contracts-bill/. The bill also seeks to codify certain aspects of the common law, including the legal recognition of the duty of extreme good faith. Importantly, the bill generally applies to an “insurance contract” that includes both general and life insurers, as well as reinsurers. The scope of the insured`s duty to provide information and the consequences of non-disclosure are part of the review of insurance contract law in New Zealand. The MBIE consultation page can be found here. The registration deadline is May 4, 2022 at 5pm. Please contact Mahony Horner Lawyers` insurance team if you have any questions about how the invoice may affect your business, or if you intend to file the invoice.
However, paragraphs 1A and 1B do not require an insurer to pay or spend in total under an insurance policy more than it would have had to pay or spend in the absence of a contract of sale. This disclosure requirement is codified with respect to marine insurance in the Marine Insurance Act, 1908, which also specifically states that the following circumstances need not be disclosed in the absence of an investigation: circumstances that reduce risk; the circumstances known or presumed to be known to the insurer; and any circumstances the disclosure of which is superfluous under any express or implied warranty. This division does not apply to insurance contracts entered into before the coming into force of this Act. Any insurance taken out in violation of paragraph 2 is null and void. subject to subsection (5), take effect notwithstanding anything to the contrary in an order, law, insurance policy, instrument or contract; and the basis of insurance law is the general law of contracts, supplemented by insurance-specific principles such as the doctrine of good faith and the principle of exoneration. No insurance contract relating to a dwelling house or its contents, or both, may contain a pro rata average condition. As noted above, a review of insurance contract law is under way, which is discussed in section V. Current legislation includes 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 and the Insurance Intermediaries Act 1994 and the Common Law Act. Statutory levy reform under the Law Reform Act 1936 is proposed as part of the General Review of Insurance Contracts Law in New Zealand.
Whatever your loss, you will not be entitled to a refund greater than the amount for which the property is insured. Currently, insurance law in New Zealand is derived from a complex mix of common law and various statutes, some dating back to 1908. The Bill seeks to repeal the following Acts and replace them with a single modernized Act (proposed as the Insurance Contracts Act, 2022): The bill that is not yet available on legislation.govt.nz Link: www.mbie.govt.nz/dmsdocument/18807-insurance-contracts-bill-draft-for-consultation As mentioned above, the Insurance Law Reform Act 1977 excludes an insurer`s right to issue a policy on the basis of forgeries. information provided by the insured unless the false declaration was substantially false and substantial (and in the case of life insurance, either fraudulently or within three years of the date of the policyholder`s death or termination of the contract). The ordinary and natural meaning of the wording at issue will be a “strong, albeit inconclusive” indicator of what the parties meant, but may not be decisive if the broader or commercial context reliably demonstrates otherwise. The same document highlights the time that has elapsed since work has been carried out in this area by summarizing the existing legislation on insurance contract law. New Zealand`s current insurance contract laws are as follows: Subject to the provisions of the Marine Insurance Act 1908, no person in whose use or benefit an insurance policy is taken out or on whose behalf an insurance policy is taken out shall in any event have an interest in: The IPSA defines an insurance contract as a contract involving a transfer of risk and to which the insurer consents. to pay, in return for a premium, a sum of money or the equivalent on behalf of the policyholder, as compensation or otherwise, if one or more uncertain events occur.