The Financial Services Council (FSC) has welcomed the Financial Markets Authority’s (FMA) decision to extend its no-action relief for health and life insurers. But with the legislation needed to make that relief permanent stalled before the election, the future of climate reporting for those insurers now rests with the next government.
FSC chief executive Kirk Hope described the extension as “a welcome and pragmatic decision that gives affected entities greater certainty until the legislation is passed.”
“Most importantly, this provides certainty for affected entities while the legislative process catches up. We’ll continue working with the next government to ensure these changes are given legislative effect,” Hope said in a statement published on the FSC’s blog on September 30.
The FSC has consistently pushed for a more proportionate approach to climate reporting for health and life insurers, arguing that their exposure to physical climate risks is limited compared with general insurers.
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As Insurance Business reported on September 29, the FMA’s extension covers five 2026/2027 reporting periods, with balance dates running from March 31, 2027, through January 31, 2028. Entities with balance dates from March 31, 2026, were already covered by the earlier relief announced in June.
The extension was needed because the Financial Markets Conduct Amendment Bill (FMCAB), which would have formally removed health and life insurers from the regime, failed to pass before Parliament rose ahead of the November 7 general election. The FMA has said there is “no certainty as to whether, or with what priority, this policy will be progressed by the incoming government.”
If the incoming government does not advance the bill, the FMA has said it would work with affected entities on a return to full reporting. Hope’s commitment to work with “the next government” signals that the FSC sees the outcome as open.
A regulatory impact statement published by the Ministry of Business, Innovation and Employment (MBIE) in April 2026 estimated annual compliance costs of approximately $261,500 to $600,000 per insurer. The FSC has put the sector-wide figure higher, at $10 million to $15 million a year.
Nine of the country’s 17 licensed health and life insurers currently fall within the regime, according to the MBIE assessment. The FSC argued their climate statements were high-level and offered limited decision-useful information.
MBIE, however, found “insufficient evidence to demonstrate that the costs faced by health and life insurers are disproportionate” and recommended keeping them in the regime with updated materiality guidance. The government chose removal regardless, and MBIE’s Cabinet paper disclosed that no direct consultation with health and life insurers took place before the decision was made.
For advisers placing health and life cover, the cost question is the practical one. Whether these compliance costs are permanently removed, or reintroduced after the election, will help determine whether insurers absorb them or pass them through to the products advisers place.
The proposed reforms extend beyond health and life insurers. According to MBIE estimates cited by law firm DLA Piper in an October 2025 analysis, the number of climate reporting entities would drop from approximately 164 to 76. That includes 66 listed issuers removed by raising the mandatory reporting threshold from $60 million to $1 billion, and 22 fund managers removed entirely. Those fund managers collectively manage approximately $230 billion.
Banks and large general insurers remain subject to existing thresholds.
The FMA has committed to responding to whichever direction the incoming government takes, and its guidance table covering the affected reporting periods is available on its website.
