Parliament Debates Insurance Contracts Bill: Focus on Consumer Protections and Genetic Testing Regulations

In a recent session of the New Zealand House of Representatives, lawmakers engaged in a detailed debate over Part 3 of the Contracts of Insurance Bill. The discussion highlighted key issues concerning consumer protections and the regulation of genetic testing within insurance contracts.

Examination of Reasonable Time Clauses

The debate commenced with Arena Williams (Labour—Manurewa) expressing concerns that discussions from Part 2 may have been prematurely concluded without thorough examination. She advocated for a clause-by-clause review to ensure all issues were addressed comprehensively. Ricardo Menéndez March (Green) sought clarification on the structure of the discussion, emphasizing the need to avoid repetition and ensure each subclause was adequately covered.

Clause 70, concerning the "reasonable time" for insurers to settle claims, emerged as a central point of contention. Williams questioned the implications of changing the standard from "fraudulently" to "dishonestly," seeking clarity on stakeholders' roles in this change and its benefits for consumers. Minister Andrew Bayly explained that the definition of a "reasonable time" encompasses both assessment and information gathering within one timeframe, with courts determining reasonableness based on context.

Remedies for Late Payments

Ricardo Menéndez March raised questions about remedies available if there is a breach in timely payment obligations under clause 70(1) to (3). He proposed an amendment mandating interest on late payments, aligning with practices in life insurance. Minister Bayly confirmed that policyholders could seek compensation for delays through existing legal provisions.

Consumer Protections and Implied Terms

Helen White (Labour—Mt Albert) discussed the use of implied terms within contracts, emphasizing the importance of consumer protections beyond express contract terms. She expressed concerns about whether consumers were sufficiently protected from punitive delays by insurers and advocated for stronger remedies in cases of unreasonable conduct.

Arbitration Provisions and Claims-Made Policies

Arena Williams questioned if clause 71's arbitration provision remained appropriate after amendments to other clauses. Dr Duncan Webb (Labour—Christchurch Central) highlighted issues with claims-made policies, advocating for an amendment ensuring reasonableness in time frames to prevent insurers from unfairly denying coverage.

Genetic Testing Regulations

A significant portion of the debate focused on Subpart 4A concerning genetic testing. Ricardo Menéndez March and others scrutinized regulatory powers and their alignment with international practices, particularly Australia's recent ban. Minister Bayly emphasized a flexible approach through Order in Council to keep regulations up-to-date globally, highlighting ongoing consultation processes with relevant stakeholders.

Consultation Process for Genetic Testing Regulations

Arena Williams sought clarity on the expected timeline and process for consultations under new Subpart 4A, emphasizing patient group involvement. Minister Bayly assured that a structured and measured consultation process would follow Order in Council procedures, involving necessary stakeholders to ensure comprehensive input.

Conclusion: A Divided House

The debate concluded with votes reflecting divisions among parties. The final vote on Part 3 as amended saw 68 votes in favor (New Zealand National, ACT New Zealand, New Zealand First) and 55 against (New Zealand Labour, Green Party of Aotearoa New Zealand, Te Pāti Māori). Most amendments proposed by Hon Dr Duncan Webb and Ricardo Menéndez March were not agreed upon, with consistent voting patterns showing support from New Zealand Labour and the Green Party, while opposition came from New Zealand National, ACT New Zealand, and New Zealand First.

Ultimately, Part 3 of the Contracts of Insurance Bill was agreed to as amended. The debate underscored the complexities involved in balancing regulatory flexibility with robust consumer protections, particularly in emerging areas like genetic testing. As the bill progresses, stakeholders will continue to monitor its impact on New Zealand's insurance landscape.