The Insurance Brokers Association of New Zealand has welcomed moves by the government to reconsider how Fire and Emergency New Zealand is funded, saying the current levy system places an unfair burden on insurance policyholders for services available to all New Zealanders.

Internal Affairs minister Brooke van Velden is exploring alternative funding arrangements for FENZ, which currently draws 95% of its income from levies on property insurance. IBANZ has argued that the mechanism is inequitable given FENZ's remit extends well beyond fire response - in the nine months to March 2026, only 59% of incidents FENZ attended were fire-related, with the remainder covering medical emergencies, maritime incidents, severe weather events and false alarms.

IBANZ chief executive Katherine Wilson said the core problem is that policyholders are effectively subsidising services that benefit the entire public. "Access to FENZ services is quite rightly available to all New Zealanders, but those who pay insurance premiums are unfairly burdened with funding them," she said.

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The scale of what is at stake gives the IBANZ position concrete financial weight. FENZ levy payments totalled nearly $800 million in 2024/25 - and with insurance brokers placing around half of all insurance in New Zealand, the sector currently functions as an unpaid administrator of the levy, calculating, collecting and remitting large sums to FENZ on behalf of the government without compensation.

IBANZ's preferred outcome is for the levy to be removed from the insurance sector entirely and replaced by central government taxation or council rates. Wilson said a national or regional collection model would be more equitable and ensure all New Zealanders contribute to funding FENZ's services.

The association also warned of longer-term risks if the current model is maintained. Growing insurance affordability pressures could reduce the pool of levy payers over time, further concentrating the funding burden on those who remain insured - and ultimately undermining the financial sustainability of the very mechanism the government has relied on since 1975.