The Financial Markets Authority (FMA) has extended its “no action” relief from climate reporting obligations for health and life insurers, investment scheme managers, and listed issuers with market capitalisation below $1 billion. The decision follows the failure of the Financial Markets Conduct Amendment Bill (FMCAB) to pass before Parliament’s final sitting day ahead of the November general election.
The relief applies to all Part 7A Financial Markets Conduct (FMC) Act requirements for the first five 2026/2027 reporting periods, covering balance dates from March 31, 2027, through January 31, 2028. Entities with a balance date of March 31, 2026, or later are not included.
For brokers and advisers who place health and life insurance or recommend managed funds, the stalled legislation creates a practical problem: the climate disclosures they may rely on when assessing insurer risk positioning are now in an uncertain state, with no clarity on whether reporting obligations will return, be permanently removed, or sit in limbo for months after the election.
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The implications go beyond compliance paperwork. If the incoming government does not progress the FMCAB, the FMA has said it would work with entities to return to full reporting, while acknowledging that they may lack comparative data for the previous reporting year. That gap could leave brokers with inconsistent or incomplete disclosure information when conducting due diligence on insurer partners.
Brokers who currently use climate statements to assess insurers’ long-term risk management should consider reviewing what disclosures are available now, before the election creates a potential reporting gap. Those placing health and life cover may also want to ask insurer partners directly about their reporting intentions for the transition period, regardless of which direction the legislation takes.
With annual compliance costs running into the hundreds of thousands per insurer, whether those obligations are reintroduced or permanently removed will also shape whether costs are absorbed or passed through to the products brokers place.
The Financial Services Council (FSC), which had advocated for a more proportionate approach to climate reporting, said the extension provided needed clarity.
“This is a welcome and pragmatic decision that gives affected entities greater certainty until the legislation is passed. The FSC has consistently advocated to government, officials, and regulators on the need for a more proportionate approach to climate reporting, and we’re pleased to see that reflected in both the proposed reforms and the FMA’s decision to extend relief,” said Kirk Hope, FSC chief executive.
He added: “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.”
The financial burden has been central to the FSC’s case. 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 put the sector-wide figure higher, at $10 million to $15 million per year across affected entities.
Nine health and life insurers currently fall within the regime out of 17 licensed insurers in New Zealand, according to the MBIE assessment. The FSC argued these insurers’ climate statements were high-level, offered limited decision-useful information, and carried disproportionate costs given that health and life insurers have limited exposure to physical climate risks such as floods and storms compared with general insurers.
MBIE found insufficient evidence that costs were disproportionate to benefits, and recommended retaining health and life insurers with updated materiality guidance. The government chose removal regardless, a decision that prompted scrutiny over the rejection of official advice earlier this year. The MBIE Cabinet paper also disclosed that no direct consultation with health and life insurers took place before the removal decision was made.
The proposed reforms go well 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 the same thresholds.
New Zealand’s trajectory differs from Australia, where mandatory climate reporting is expanding rather than contracting. Group 1 entities began reporting for financial years starting January 1, 2025, with Group 2 from July 1, 2026, and Group 3 from July 1, 2027, according to guidance published by Pitcher Partners in January 2026.
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FMA general counsel Liam Mason said the regulator would respond to whichever direction the new government takes.
“We will not have clear direction on the future of this policy until the new government forms after the November election. This means entities do not know whether they will continue to be required to lodge climate statements and may not know for some months. The ‘no-action’ approach will avoid unnecessary compliance costs and provide some certainty for climate reporting entities in the interim,” Mason said.
If the incoming government progresses the FMCAB, the FMA has said it will provide further relief as needed. None of the major parties have published detailed positions on climate-related financial disclosures ahead of the election.
The FMA has published a guidance table covering the specific reporting periods affected by the relief, which entities affected by climate reporting changes are encouraged to review.
