FANZ: all life insurance contracts should be consumer contracts

Appearing before parliament's Finance and Expenditure Committee which is considering the Contracts of Insurance Bill, FANZ chief executive Nick Hakes said there are about 450,000 small businesses in NZ which often require insurance protection for both personal and business reasons.

“The unintended consequence of having a consumer and non-consumer definition in the bill is that different disclosure obligations will apply for the policies which are for personal versus those which are for business purposes,” Hakes said in appearing before the committee on Wednesday.

Currently, a small business owner wanting to take out life insurance to protect both their family and their business “would need to complete one personal statement on health, family history and  pastimes and the disclosure obligations are the same,” he told the committee.

Even when used to protect a small business, an insurance contract is currently treated as part of the same contract as that protecting personal interests.