Maharey Steve: Farmers’ Mutual Group Bill — First Reading 
Maharey Steve: Farmers’ Mutual Group Bill — First Reading 
[Volume:639;Page:9853] 
Hon STEVE MAHAREY (Labour—Palmerston North) 
: 
 I move  
That the Farmers’ Mutual Group Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Primary Production Committee. This is a bill promoted by the Farmers’ Mutual Insurance Association and I think the House will forgive me if I acknowledge that members of the association are in the gallery today. The organisation has its head office in my electorate in Palmerston North and it gives me a lot of pleasure to therefore bring the bill before the House. 
The bill supports and strengthens one of New Zealand’s long-established and proud rural service companies. The bill updates the legislation under which the mutual operates and will undoubtedly assist it to continue to flourish in the future. 
The mutual and its predecessors have provided general insurance and risk protection services to farmers and members of the rural community for more than 100 years. Mutual associations were first formed in 1905 after the passing of the Mutual Fire Insurance Act 1903. That Act allowed associations to be established to offer fire insurance to farmers and owners of isolated properties. These associations were called mutuals because they were owned by their policyholders or members. 
In 1955 the Mutual Insurance Act was passed which allowed mutuals to be incorporated and to merge. That Act also prescribed their powers and governance requirements. The Farmers’ Mutual Insurance Association is now the only mutual that is subject to the 1955 Act. In recent times it has become clear that the provisions of the 1955 Act are outdated and inappropriate for the operation of a modern insurance and financial services business. They are after all from the middle of the last century. Among other things the Act inhibits the mutual from providing relevant products and services and from competing effectively with its competitors. 
The principal purpose of this bill therefore is to modernise the mutual’s powers and governance regime so that it can operate as a sophisticated modern business consistent with contemporary corporate governance principles. At the same time the bill preserves the association’s mutual status and ownership by members and its principal business of providing rural risk insurance and advice which is the business that the mutual was first established to provide. In essence the bill gives the mutual the same capacity and powers as a company and a modern governance regime based on the Companies Act 1993 while retaining its mutual structure. It also gives the mutual a new name—Farmers’ Mutual Group. 
The bill removes the mutual from the jurisdiction of the 1955 Act and the outdated requirements in that Act and repeals the Farmers’ Mutual Group Act 1998. That 1998 Act proved to be incapable of delivering the required results and will be repealed with the passing of this new legislation. This current bill has no impact on existing members’ rights to membership or on existing insurance and other business. 
The modernisation of organisations by means of private bills is not new to this House. We have seen it with others from time to time especially trustee and insurance companies. This bill has been advertised in accordance with the Standing Orders and all persons who have a direct interest in the bill have been notified of the intention of the mutual to promote it. In addition the mutual has written to each of its 35000 members advising of the bill and its contents and inviting comment. Those comments were overwhelmingly positive and support the changes sought in this bill. 
This is a bill that we hope will proceed rapidly through this House. I know that my colleague Simon Power who has a direct interest in this bill too—not only because he is also a local MP for Palmerston North but because he worked in that building for some time—is keen to see it expedited. I have spoken with David Carter chair of the Primary Production Committee and he has kindly undertaken to progress this bill through his committee with all possible speed. So I commend the bill to the House and look forward to its short and speedy passage.