The regulatory environment

New Zealand has one of the least regulated insurance markets in the world.

Many other countries including the UK, USA and Australia have Insurance Commissions which regulate the insurance industry. In some cases this extends to the issuing of approvals for new product releases. The bureaucracies that have evolved to support this function obviously have to be paid for, and ultimately add to, the cost of insurance.

The regulatory environment that we enjoy in New Zealand is successful because the insurance industry has been proactive in developing its own self-regulatory framework.

The Insurance Council's self-regulatory framework is:

Framework	Requirement
The Fair Insurance Code	Act ethically
The Insurance & Savings Ombudsman Scheme	Be subject to independent review
The Insurance Council's Solvency Test	Be financially sound

While the Insurance Council assumes no liability for its members, compliance with the self-regulation framework assures customers of quality service.

The Fair Insurance Code

Insurance is a contract between the insurer and the customer based on the principle of "good faith". The customer (by paying a premium) depends on the insurer to provide a service and to settle claims fairly and efficiently. In turn, the insurer relies on the customer to act honestly, and to accurately disclose all information relevant to the insurer being able to provide insurance cover that meets the customer's needs.

The Fair Insurance Code was developed by the Insurance Council as a set of principles which aims to continually improve the standard of practice and service member companies provide to their customers. This set of principles is in additional to those obligations created by the law.

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