The implementation of New Zealand’s Contracts of Insurance Act in November 2027 is expected to bring significant changes to how advisers engage with clients, how insurers consider new business and assess claims and potentially which insurance products advisers recommend.
These were among the key issues explored during a panel session titled Re:defining Fairness, at QuoteMonster’s Re:thinking Insurance event in Auckland this week.
The panel featured independent insurance consultant Nick Kirwan, experienced Auckland-based adviser, Christine Zhao, Financial Markets Authority Senior Adviser, Insurance, Charis Danieli, and Quotemonster senior research team member Kim Oliver.
Four Dimensions of Fairness
Giving perspective to the discussion, Kirwan identified four categories through which insurance fairness could be assessed:
- Disclosure fairness: Ensuring consumers understand what their policies cover, exclusions, discretionary benefits and potential premium changes
- Contractual fairness: Addressing policy wording and potential imbalances between the rights of insurers and policyholders
- Procedural fairness: Ensuring claims processes are transparent, accessible and conducted within reasonable timeframes
- Pricing fairness: Providing greater clarity about premium increases, particularly unpredictable changes to insurers’ underlying premium rates
Kirwan suggested these considerations could give advisers another dimension when assessing insurers, beyond traditional product features and benefits.
Claims Experience Highlights Differences
Representing the adviser voice on the panel, Zhao shared with a packed audience of her peers a practical illustration of procedural fairness, recounting two recent trauma claims involving clients diagnosed with cancer.
Despite similar circumstances, one insurer paid the claim within a week, providing clear communication and information about additional benefits and support services.
The second claim took more than two months, involving additional documentation and verification with an overseas hospital.
Although both claims were ultimately paid, Zhao said the experiences were markedly different.
Her message was that advisers and clients should understand insurers’ claims procedures in advance, particularly where additional verification could delay payment.
Changes to Disclosure and Claims Decisions
From the regulator’s perspective, Danieli explained that the CoIA reforms would shift consumers’ disclosure obligations towards taking reasonable care not to make misrepresentations, rather than determining independently what information an insurer might consider relevant.
…insurers will …need to ask clearer, more specific application questions
She told the audience insurers will consequently need to ask clearer, more specific application questions, while consumers must continue answering honestly and carefully.
Importantly, Danieli stressed that the reforms would not mean every claim must be paid.
Instead, she said insurers would need to consider the circumstances of any misrepresentation, including what underwriting decision would have been made had accurate information been provided.
She added this would require revised claims assessment frameworks, improved record-keeping and additional staff training.
Kirwan also highlighted the complexity insurers could face in applying different disclosure obligations to consumer and non-consumer insurance contracts.
Implications for Product Research and Adviser Recommendations
Quotemonster’s Oliver confirmed her firm was reviewing how the reforms would influence its product research and ratings, particularly concerning discretionary benefits and policy wording.
She highlighted the distinction between contractual benefits, where insurers commit to paying when specified conditions are met, and discretionary benefits, where payment remains subject to the insurer’s decision.
Oliver indicated that greater clarity around these provisions could influence product assessments, with Quotemonster examining whether existing rating criteria should be amended or new measures introduced.
She also distinguished between product ratings, which assess the benefits and features of individual policies, and broader insurer fairness ratings, which consider how insurers treat policyholders.
…simply meeting minimum legislative requirements would not necessarily improve an insurer’s comparative rating
Importantly, Oliver indicated that simply meeting minimum legislative requirements would not necessarily improve an insurer’s comparative rating.
Where insurers provide benefits or protections exceeding those requirements, however, she indicated these differences could be reflected in comparative assessments.
During the session, a show of hands suggested most advisers present believed the reforms, once implemented, could definitely influence their future product recommendations.
Improving the Adviser and Client Experience
In focusing on fairness, which remains the over-riding agenda in implementing the CoIA reforms, Zhao advocated more accessible, consolidated policy information, also supported by Kirwan, enabling advisers and clients to understand current cover, policy amendments and applicable conditions without navigating multiple documents.
She also highlighted the importance of advisers taking additional care when assisting clients with application questions, particularly where questions are broad or contain multiple elements.
Danieli reinforced the importance of communication between advisers and insurers, noting that customers should not be disadvantaged by gaps between their respective processes.
Preparing for November 2027
She also emphasised that insurers should treat implementation as a substantive business reform rather than merely a legal documentation exercise, embedding changes across underwriting, product design, administration and claims.
For Quotemonster, Oliver said the immediate priority was reviewing insurers’ revised policy documents to determine how changes should be reflected in its research and ratings.
Kirwan cautioned insurers against aiming only for minimum compliance, encouraging them to embrace the broader intention of improving customer outcomes.
For advisers, Zhao’s concluding message was equally practical: there was no need to wait until November 2027 to improve application discussions, document client responses thoroughly and ensure relevant information reaches insurers.
See also: Intermediary Duties Under FMA Microscope
RiskinfoNZ will report further developments on this body of industry work as all parts of the sector count down to 15th November 2027, when the reforms take effect.
