Insurance Law Reform Act 1985

1: Short Title and commencement
1: This Act may be cited as the Insurance Law Reform Act 1985.
2: This Act shall come into force on 1 April 1986.
2: Act to bind the Crown
This Act shall bind the Crown.
3: Interest payable from 91st day after date of death
Amendment(s) incorporated in the Act(s)
4: Abolition of protection of life policies from creditors
1: Amendment(s) incorporated in the Act(s).
2: The enactments repealed by subsection (1) shall continue to apply, as if they had not been repealed, in respect of policies held by a person who died or was adjudged bankrupt before the date of the commencement of this section.
3: Amendment(s) incorporated in the Act(s)
5: Repeal of Inalienable Life Annuities Act 1910
1: The Inalienable Life Annuities Act 1910
2: With respect to any inalienable life annuity policy issued under the Inalienable Life Annuities Act 1910 Inalienable Life Annuities Act 1910
6: Need for insurable interest in life policy abolished
A contract of assurance on the life of a person is not void or illegal by reason only of the fact that the insured under the contract does not have, or did not have when the contract was entered into, any interest in the life of that person.
7: Need for insurable interest restricted
1: Except as provided in the Marine Insurance Act 1908
a: any contract of indemnity against loss; or
b: any contract of assurance on the life of a person.
2:
3: Every insurance made contrary to subsection (2) is void.
4: Nothing in this section limits the provisions of the Marine Insurance Act 1908 Section 7(2) repealed 1 July 2004 section 374 Gambling Act 2003
8: Repeal of Life Assurance Act 1774
As from the commencement of this Act, the Life Assurance Act 1774 (14 Geo III, c 48) shall cease to have effect as part of the law of New Zealand.
9: New sections substituted
Amendment(s) incorporated in the Act(s)
10: Consequential amendment to Minors' Contracts Act 1969
Amendment(s) incorporated in the Act(s)
11: Consequential repeals
(a)–(c): Amendment(s) incorporated in the Act(s).
d: Life Insurance Amendment Act 1967:
e: Amendment(s) incorporated in the Act(s).
12: Repeal of power to regulate provisions of fire insurance policies
Amendment(s) incorporated in the Act(s)
13: Purchaser of land entitled to benefits of insurance between dates of sale and possession
1: Subsection (1A) applies during the period beginning with the making of a contract for the sale of land and all or any fixtures on that land, and ending on the purchaser taking possession of the land and fixtures, or final settlement (whichever occurs first).
1A: During the period specified in subsection (1), any policy of insurance maintained by the vendor in respect of any damage to or destruction of any part of the land or fixtures enures, in respect of the land and fixtures agreed to be sold and to the extent that the purchaser is not entitled to be indemnified or to require reinstatement of that land and those fixtures under any other policy of insurance, for the benefit of the purchaser as well as the vendor.
1B: In particular, the purchaser is entitled to be indemnified by the insurer or to require the insurer to reinstate that land and those fixtures in the same manner and to the same extent as the vendor would have been so entitled under the policy if there had been no contract of sale.
1C: However, nothing in subsections (1A) and (1B) obliges an insurer to pay or expend more in total under a policy of insurance than it would have had to pay or expend if there had been no contract of sale.
2: It shall not be a defence or answer to—
a: a claim by a purchaser against an insurer under this section, that the vendor otherwise would not be entitled to be indemnified by the insurer or to require reinstatement because the vendor has suffered no loss or has suffered diminished loss because the vendor is or was entitled to be paid all, or the balance of, the purchase price, by the purchaser; or
b: any claim under this section by a purchaser against the vendor's insurer in relation to the land or fixtures sold, that the purchaser's entitlement under the policy to which the claim relates is affected or defeated by the existence or terms of another policy; or
c: any claim by a purchaser against an insurer (other than the vendor's insurer) that the purchaser's entitlement under the policy to which the claim relates is affected or defeated by a claim under this section.
3: Where, in respect of a contract for the sale of land and all or any fixtures thereon,—
a: there is damage to or destruction of any part of the land or fixtures during the period specified in subsection (1); and
b: the whole or part of the amount payable in respect of the damage or destruction under the policy of insurance maintained by the vendor is payable to a mortgagee of, or any person claiming through, the vendor— the purchase price payable under the contract of sale shall be reduced by the amount so payable to the mortgagee or person claiming through the vendor.
4: In this section, vendor
5: This section shall not apply to the extent that the purchaser and vendor under a contract of sale expressly agree at any time.
6: This section—
a: shall apply only in respect of contracts of sale made after the commencement of this Act; and
b: subject to subsection (5), shall have effect notwithstanding any provision to the contrary in any enactment, rule of law, policy of insurance, deed, or contract; and
c: shall apply, with all necessary modifications, in respect of a sale or exchange of land and fixtures by order of a court as if the order were a contract of sale. Section 13(1) substituted 1 January 2008 section 364(1) Property Law Act 2007 Section 13(1A) inserted 1 January 2008 section 364(1) Property Law Act 2007 Section 13(1B) inserted 1 January 2008 section 364(1) Property Law Act 2007 Section 13(1C) inserted 1 January 2008 section 364(1) Property Law Act 2007 Section 13(2)﻿(a) substituted 1 January 2008 section 364(1) Property Law Act 2007
14: Double insurance relating to contracts for sale of land
Where there is a contract for the sale of land and all or any fixtures thereon, it shall not be a defence or answer to any claim by the purchaser against an insurer (other than the vendor's insurer) that the purchaser's entitlement under the policy to which the claim relates is affected or defeated by the existence or terms of any policy held by or on behalf of the vendor.
15: Prohibition on inclusion of pro rata condition of average in contract of insurance relating to dwellinghouse
1: No contract of insurance relating to a dwellinghouse or to any of the contents thereof or to both shall contain a pro rata condition of average.
2: Any provision of any contract of insurance that contravenes subsection (1) shall be of no effect.
3: In this section dwellinghouse
4: The application of this section to any contract of insurance relating to a dwellinghouse shall not be excluded by reason only that part of the premises is used as a shop or office or for business, trade, or professional purposes.
16: Disclosure of pro rata condition of average
1: Where a contract of insurance (not being a contract to which section 15 section 3
2: Notwithstanding subsection (1), where it is not reasonably practicable for the information required by that subsection to be given to the insured in writing before the contract is entered into, that subsection shall be deemed to be complied with if the insurer—
a: gives the information orally before the contract is entered into; and
b: gives the information in writing as soon as it is reasonably practicable to do so.
3: Without limiting the means by which the requirements of subsections (1) and (2) may be satisfied, it is hereby declared that any requirement which is imposed by any provision of those subsections and which requires information in writing of the nature and effect of a pro rata condition of average to be given shall be satisfied if that information is given in writing in the following form: “The meaning of subject to average
1: Your insurance policy contains a provision making it subject to average.
2: That provision will have effect only if the property insured under the policy is underinsured at the time of loss.
3: If the property insured under the policy is underinsured at the time of loss, the following rules apply:
a: if you suffer a total loss, the provision will have no effect:
b: if you suffer a partial loss, the maximum amount that you may recover will bear the same proportion to your actual loss as the amount for which the property is insured bears to the full value of the property:
c: whatever your loss, in no case will you be entitled to recover more than the amount for which the property is insured. Example
4: This section does not apply in respect of a contract of insurance entered into before the commencement of this Act.