The Financial Services Council says the Government has made the right call by removing health and life insurers from climate reporting rules, which it says added compliance costs of $10-$15 million a year without clear customer value.
Chief Executive Kirk Hope says this is a practical decision, and the Government deserves credit for listening. He notes health and life insurers do not insure homes, farms or roads against floods and storms but protect people when they get sick, can’t work or when their family needs support.
“The previous regulations treated very different risks as if they were the same. That added compliance cost of $10–$15 million a year without clear value for New Zealanders.”
Hope says the change comes at an important time for the sector and for customers.
“This is a welcome relief at a time when health and life insurers are facing real pressure on premiums and Kiwis are watching every dollar. Removing unnecessary cost from the system is the right thing to do.”
Hope says climate risk still matters and insurers will keep managing it through governance and prudential oversight.
“But mandatory investor-style climate reporting was not the right tool for health and life insurance customers.”
FMA – No Action on Climate Reporting Obligations
Meanwhile, the FMA says health and life insurers will no longer be expected to lodge climate statements ahead of legislation changes, following the announcement that they will be removed from the climate related disclosures regime and will no longer be required to produce annual climate statements.
The regulator says it will provide interim relief in the form of taking a ‘no action’ approach to entities who are expecting their climate reporting obligations to cease once legislation is passed.
FMA General Counsel, Liam Mason says the FMA recognises that many life and health insurers will be impacted by the uncertain time-frame in which the amending legislation might be passed.
“This will mean that they do not know whether they will be required to lodge climate statements. This [no action] approach will avoid unnecessary compliance costs and promote the development of fair, efficient and transparent financial markets.”
“It also aligns with the intent of the proposed legislative change following the recently announced government decisions.”
The ‘no action’ approach began on June 19 and will apply to life and health insurers with upcoming lodgement dates for the 2025/2026 reporting period. This means that life and health insurers with 31 March 2026 balance dates onwards are not required to lodge climate statements.
“We will continue to monitor the progress of the amending legislation,” says Mason, noting if changes are not made for the 2026/2027 reporting period the FMA will revisit this ‘no action’ approach.