Nine insurers are about to save up to $5.4 million a year. Your premium will not notice

Source: FMA, No action on climate reporting obligations for health and life insurers

Officials put the cost of a climate statement at $261,500 to $600,000 per insurer per year. Nine life and health insurers are being removed from the regime. Spread across everyone with health cover that is at most $3.86 each.

By Henry Smith · Regulation · 2026-08-12

Officials estimate the cost for a health or life insurer to produce a climate statement at "approximately $261,500 to $600,000 per year", and nine of them are being removed from the regime (Cabinet paper, Removal of Health and Life Insurers from the Climate-Related Disclosures Regime, 21 May 2026, published 15 July 2026, retrieved 20 August 2026). That is $2.35 million to $5.40 million a year of compliance cost coming off the New Zealand life and health insurance industry. Set against roughly 1.4 to 1.6 million New Zealanders holding health cover, the entire saving is worth between $1.49 and $3.86 a person a year, if every cent of it were passed on and none went to life policyholders.

What the FMA published

On 18 June 2026 the FMA announced it would take a "no action" approach to climate reporting by life and health insurers, "following a recent government announcement that they will be removed from the climate related disclosures (CRD) regime and will no longer be required to produce annual climate statements".

FMA General Counsel Liam Mason said the approach recognises "the uncertain timeframe in which the amending legislation might be passed" and "will avoid unnecessary compliance costs and promote the development of fair, efficient and transparent financial markets". The no action approach began on 19 June 2026 and means "life and health insurers with 31 March 2026 balance dates onwards are not required to lodge climate statements". Affected insurers "are not expected to apply for this relief or otherwise inform FMA of their reliance on it" (FMA, MR No. 2026-30, 18 June 2026, retrieved 20 August 2026).

A no action approach is not a repeal. The FMA is explicit that it "will not take action against a person for breach of a statutory or regulatory obligation" but that this "does not necessarily preclude third parties from taking legal action". If the legislation is not passed before affected insurers must prepare 2026/2027 statements, the FMA says it will revisit the approach. The FMA later clarified that the final period covered runs to 31 December 2026, and the first period not covered is the year to 31 March 2027 (FMA, page updated 4 August 2026, retrieved 20 August 2026).

The government decision behind it came from the Minister of Commerce and Consumer Affairs, Hon Cameron Brewer, on 18 June 2026, on the basis that health and life insurers "aren't directly exposed to climate risks like extreme weather events, so there's little value in making them report on it". Nine health and life insurers are removed, alongside 88 businesses removed by earlier decisions, taking the regime from 164 reporting entities to approximately 67 (Beehive, 18 June 2026, retrieved 20 August 2026).

What the saving is worth per policyholder

Nine insurers at $261,500 to $600,000 each is $2,353,500 to $5,400,000 a year. That is our arithmetic on the Cabinet paper's own per-entity range.

Two comparisons put it in scale. The Cabinet paper records that removing these insurers costs the Crown "approximately $50,000 per year in levy funding" that pays the FMA to regulate the regime, so the industry saving is between 47 and 108 times the public revenue given up. And on the consumer side, health insurance membership in New Zealand has held at roughly 1.4 million people (Insurance Business NZ, 12 August 2026, retrieved 20 August 2026, reporting Westpac Economics), while Southern Cross's "more than 945,000 members" are "approximately 60% of the health insurance market (by customer numbers)" (Commerce Commission, 25 May 2026, retrieved 20 August 2026), which implies a market of about 1.58 million on our arithmetic.

Our calculation	Figure
Annual cost per insurer of producing a climate statement	$261,500 to $600,000
Insurers removed from the regime	9
Total annual industry saving	$2.35m to $5.40m
Crown levy revenue given up	about $50,000 a year
Health-insured New Zealanders, published and derived	about 1.4m to 1.58m
Saving per health-insured person, at full pass-through	$1.49 to $3.86 a year
Aon's forecast 2026 New Zealand medical trend rate, employee medical plans	18%
That trend on an illustrative $2,000 annual premium (Aon, 4 Dec 2025; not a QuoteHub quote)	about $360
The saving as a share of one year's medical inflation	0.4% to 1.1%

QuoteHub arithmetic on the Cabinet paper's per-insurer cost estimate, the Commerce Commission's market share statement and Aon's 2026 medical trend rate of 4 December 2025, all retrieved 20 August 2026. Aon's rate is for employee medical plan costs, so applying it to an individual premium is an illustration only. The per-person figure charges the whole saving to health policyholders and none to life policyholders, so it is an upper bound.

The saving is real. It is also, at the very best, four tenths of one percent to just over one percent of a single year's medical cost escalation. No pass-through mechanism exists, no insurer has committed to one, and a saving of that size would be invisible inside a renewal notice even if it happened.

What consumers stop being told

The insurers leaving the regime are the largest ones. A licensed insurer is a climate reporting entity only if it is "large", meaning total assets above $1 billion for two consecutive years or annual gross premium revenue above $250 million for two consecutive years (Financial Markets Conduct Act 2013, s 461Q, retrieved 20 August 2026). The disclosures being dropped are therefore the ones covering the most policyholders.

What was in them is more consumer-relevant than the Minister's rationale suggests. Chubb Life Insurance New Zealand, which reports approximately 270,000 customers, published its third climate statement on 16 April 2026 for the year to 31 December 2025. Under chronic physical risk it states that heatwaves and poor air quality "might impact physical health" and that "when claims exceed our expectations our overall solvency is impacted, and over time this may mean we have to adjust the cost of cover. This can lead to increases in the cost of premiums for customers." Under reinsurance it states that "if the costs of reinsurance rise, it will be more expensive for us to provide customers with insurance. This could increase prices for customers", and that reinsurers may be "unprepared to offer reinsurance for some kinds of cover". Under acute physical risk it states that after a significant weather event it "may need to obtain more detailed information from customers about their health and lifestyle before issuing a new policy", with "stricter eligibility checks or longer processing times" (Chubb Life Insurance New Zealand Limited, New Zealand Climate Disclosures 2025, retrieved 20 August 2026).

That is an insurer putting in writing, in a document it was legally required to produce, that climate exposure could raise your premium, tighten your underwriting and restrict what it can offer. On the FMA's timetable, a 31 December balance date insurer's next reporting period ends 31 December 2026 and is covered by the no action approach, which makes the 2025 statement the last one produced under obligation.

The FMA notes that some insurers "may choose to continue to produce climate statements on a voluntary basis", and reminds them that "the fair dealing provisions in Part 2 of the FMC Act will continue to apply to representations made in voluntary reporting". Voluntary is the operative word.

What it means for your cover

Nothing in your policy changes. No benefit, exclusion, premium or claim outcome depends on whether your insurer files a climate statement.

What changes is what you can look up. If you want to know what your life or health insurer has said about climate exposure to its underwriting, its reinsurance costs and its pricing, the statements already lodged remain published and are worth reading once. There may not be another one.

The honest limits

Nobody in government supported this unanimously. The Cabinet paper records that "MBIE's position is that, on balance, health and life insurers should continue reporting", because "the effectiveness of the regime relies on having a broad base of reporting entities to generate consistent, comparable, economy wide information", and that the Ministry for the Environment agreed with MBIE. It also records that the Financial Services Council, the industry association whose members are the insurers concerned, submitted for the removal, and that there was "no direct consultation with health and life insurers" before the decision.

The $261,500 to $600,000 figure is officials' estimate as recorded in a Cabinet paper. It is not audited, the paper does not show the derivation, and we could not obtain the Regulatory Impact Statement that sits behind it.

We cannot verify that any saving reaches a policyholder, and we have not found a single New Zealand insurer that has attributed any premium movement to climate reporting costs in either direction. Our per-person figures are ours, they use two different denominators because no single official count of health-insured New Zealanders was available to us, and they assume complete pass-through, which is an assumption and not a finding.

The change is not yet law. It is intended to be made by an Amendment Paper to the Financial Markets Conduct Amendment Bill, and until that passes the reporting obligation in Part 7A remains on the statute book with an FMA no action approach sitting over it.

Sources

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