Contracts of Insurance Bill

When we last had this bill in the House, we were up to call No. 3 and the speech is for the Green Party.

Thank you, Madam Speaker. I just acknowledge that the last time we were debating this bill, urgency had just lifted just as I was rushing to the House to take the call on this bill. I want to start by acknowledging that modernising our insurance laws is really critical at a time that New Zealand is experiencing more natural disasters and weather events now than we would have done, say, 30 years ago.

The Christchurch earthquakes showed us just how important it is to ensure that, as legislators, we keep looking at insurance law to ensure that it adequately protects people and ensures that when, for example, people face a natural disaster, they’re able to recover promptly and that there are no undue barriers for people to stay well—acknowledging, none the less, that insurance law will cover a range of other issues, including health insurance, life insurance, etc. I do think it’s really timely to speak to, for example, what some communities in places like Auckland, Dunedin, and other parts of the country have experienced over the past couple of years in their interactions with insurance companies, and many communities are still waiting to receive financial support and payments.

This bill is quite topical, and I want to thank every submitter who has contributed to this bill, because I think it’s quite a dense bill, and to make contributions to this bill would have required quite a bit of intellectual grunt. There’s been a few themes that have arisen through the consideration of this bill by the Finance and Expenditure Committee. A lot has been talked about on how this bill drew from the work of the previous Government. I do want to mihi to former Labour Ministers who had done a lot of work in this area, which has been acknowledged by previous Labour Party speakers in their contributions. I do wish that this current Government had retained some of the spirit from the work that had been done in the previous Government, and that’s reiterated in our differing view in the select committee report on this bill.

Part of what the previous Government was trying to address was around insurers completing claims in a timely manner, and this has been something that was brought to the forefront during the Christchurch earthquakes, but I think that it is really clear—well, I don’t think it’s really clear that, actually, right now, the time to complete a claim is really delayed at the moment. Having something like a 12-month period to have those issues addressed would have been a much better way than what we’ve got in this bill, and just having some sort of vague stuff in the bill to try to address that does not do justice to our communities who deserve a bit of certainty and clarity should they end up disputing some of these processes.

The other thing that came through really strongly in the select committee was around how genetic testing would play out in relationship to this bill. We’ve had a lot of submitters who had really, really passionate and informed views around the dangers that the use of genetic testing poses to consumers, and we were fundamentally disappointed that the select committee, instead of heeding those warnings from submitters and putting, basically, a prohibition on the use of genetic testing for the purposes of insurance, left it up to regulations.

There’s two reasons for this that we’re concerned about. One of them is that submitters did actually present really good evidence as to why a prohibitive approach would’ve been better. I think genetic testing, ultimately, will end up discriminating against disabled people when it comes to health insurance, and when disabled people already face huge barriers to a good quality of life, the use of genetic testing will be problematic.

The second is that many times when we have left controversial issues to regulations, it really relies on the Government of the day resourcing the entities that then will be in charge of adequately addressing the nuances that are left to those regulations. We have seen in other forms of legislation how simply leaving something to regulations actually ends up creating almost like the worst of both worlds, where you don’t end up having adequate engagement between Government and departments and people on the ground to then lead to regulations that reflect the evolving situations and lives of people. We have seen this with issues around medicinal cannabis. We also had issues around how this would play out in the Therapeutic Products Bill. I really worry that we could end up without commitments from this Government to adequately ensure that—

💬 Hon Andrew Bayly: Well, you don’t need to worry.

RICARDO MENÉNDEZ MARCH: Well, it’s good to get the Minister’s assurances; none the less, the Green Party’s position is we would have backed this bill if it had a full prohibition on it.

💬 Hon Andrew Bayly: Ye of little faith!

RICARDO MENÉNDEZ MARCH: Look, it’s good to have the Minister here engaging so not constructively on the issue, but there are other issues that I wanted to unpack.

Arena Williams, from the previous contribution, already talked about it, and this was around particularly the contribution from the Insurance Council of New Zealand, and they talked about how fraud and dishonesty are two different concepts. The changes that we put in as this bill evolved actually leaves us, again, relying on a less clear definition, which is “dishonesty”, which actually is, when it comes to how we define things in law, more vague than, say, “fraud”. There’s a different intent with dishonesty and fraud. I think, to me, what this move does is it weakens the protections that consumers would have had.

The whole intent of this bill was not just to modernise and acknowledge that, actually, we’ve got different pieces of legislation that interact with insurance companies and customers but, actually, to strengthen the rights of consumers. We do think that, on balance, the way that this Government has moved on with this bill has actually weakened consumer protection rather than strengthening it.

It is also important to note that a lot of how this plays out relies a lot on case law. There will be a lot of unchartered territory here as well in how some of this bill will come into play. With some of the new additions, we think that will take some time to also figure out whether these things are working, and this is why we should have taken a consumer-centred approach to legislation in relationship to insurance policy.

Just to conclude, we’ve got two amendments that we look forward to discussing in the committee of the whole House. If those amendments are resolved, we will be in a position to feel comfortable supporting this bill, but right now, the bill as it is is not something we can go ahead and support, despite our initial excitement about modernising insurance law. For that reason, the Green Party won’t be supporting this bill at second reading.

Thank you, Madam Speaker. I rise to speak on behalf of ACT on the Contracts of Insurance Bill. I do want to acknowledge the hard work of the Finance and Expenditure Committee, which I was a member of, and I also do want to acknowledge that a lot of the work and thinking was done under the previous Labour Government, and particularly the Hon Dr Duncan Webb. He was a passionate contributor to the select committee as we worked through what is quite a substantial bill and, in some respects, quite technical but is actually making some improvements—necessary improvements—to our insurance sector in New Zealand.

What this bill is designed to do is, really, modernise the settings under which different insurance products are offered in New Zealand. Interestingly, it is actually an omnibus bill. Again, if you look at the commentary on the bill, you can see it is actually amending a whole lot of Acts, and tidying up actually a whole lot of Acts, some of which are quite old—one is from 1908—right through to 1994. It really is an attempt to modernise, bring the insurance industry and sector into the modern age, and actually make it much easier for consumers to understand what is going on, and also it puts in place the necessary requirements for insurers to make sure that they’re properly disclosing what needs to be required. Really, it is a focus on this clarity around disclosure—what people have to provide to insurers, and the information that insurers have to provide back—and really trying to decrease the burdens on all parties and actually make things much more seamless.

It was nice to hear the contribution from the last speaker from the Greens, Ricardo Menéndez March, talking a little bit about this issue of genetic discrimination. In fact, this is a really interesting issue that was not originally included in the bill. It’s actually an area that is very dear to my heart, because genomic medicine is actually the way of the future. It’s going to become more and more important in healthcare settings, and, obviously, genetic testing also allowing us to understand diseases you might be susceptible to or you are living with and how they can be treated is extremely important. It was through the advocacy of submitters, people actually engaging in the select committee process, that this issue around genetic discrimination and how it kind of links in with the insurance industry was uncovered. Our committee spent some time considering this very, very important issue and what we could do.

It was quite timely, as well, that as we were considering this our neighbours across the Tasman were also having a discussion, because, again, their stakeholders have been lobbying their Government for a long time to actually look into this area of genetic discrimination and how the insurance industry may or may not require genetic tests and their results to be disclosed. That conversation was going on and, in fact, it was announced only a few weeks ago that they will be undertaking some reform in Australia. In a sense, we have kind of beaten them to the punch by actually updating this bill and making this very sensible provision.

I was surprised to hear from the Greens that they couldn’t support it because a full ban wasn’t legislated. I’ve got to say that their advocacy tonight was probably more fulsome than it was during our discussions at the select committee, but I do think we’ve come to a sensible position where we’re actually allowing genetic discrimination and the kind of use of this information to be banned by regulation. I think that was a very sensible place that our committee arrived at, given that this issue was one that wasn’t originally in the bill and wasn’t considered.

With that, I’m going to end my contribution. ACT will be supporting this bill on its second reading, and we look forward to further discussion on it. I’m sure the Minister will have many more things to say in the committee of the whole House. Thank you.

Members, this debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. tomorrow.

Debate interrupted.

The House adjourned at 9.59 p.m.