Insurance Contracts Law review, part 2, the return of the detailed submission.

My detailed submission to MBIE's review is completed and I'll add a link below. 

In short, it's my view that changes in the insurance industry and technology advances over the last 20 years mean that there is an imbalance between insurers and insureds, particularly for consumers and S.M.E. This imbalance is problematic, as it means that fairness is a matter of internal practice by insurers who are, at the very least, large national organisations, and more likely than not, multinationals. The law as it stands allows  capricious behaviour, and the regulatory framework lacks mechanisms to effectively dissuade unreasonable or outright bad behaviour by insurers. I am professionally aware of instances where insurers have used threats of delaying claims assessment if lower settlement payments aren't accepted, and of an instance where incorrect policy interpretations have been sustained because the insurer knows the insured cannot afford to litigate. It is unclear whether such behaviour is a breach of an insurers duty of good faith as it is currently (loosely) defined, and if it is, the consequences for the insurer would be almost negligible.  

This situation is unsurprising; our insurance law is largely unmodified from the common law rules which were set down when Britannia ruled the waves under sail. Rules designed around the time it takes for a wooden ship to sail between Indonesia and London are inappropriate when the same distance can be spanned by information almost instantaneously.  The world has changed and New Zealand has been left behind, Australia and England have both overhauled their insurance law, and we have failed to do so.   

I also believe that the current system of dispute resolution schemes is undermined by commercial pressures and is ineffective.  The Court system is too slow, too expensive, and too complex for the majority of insurance disputes. It has taken the Christchurch Earthquakes to provide sufficient cases for the Courts to develop case law on a number of issues. I believe that a 2 tiered system of an insurance disputes tribunal, with the power to remove claims from insurers to be settled by an independent claims handler in the case of overt delay, and the development of a permanent Insurance list, to speed up the resolution of interpretive issues. The Federal Court of Australia established such a list in march 2016 and the system appears to be working well.