Nine health and life insurers are heading into an extended period of regulatory uncertainty after the legislation designed to formally remove them from New Zealand’s climate disclosure framework failed to pass before Parliament rose ahead of the November 7 general election.
The Financial Markets Authority (FMA) announced on September 29, 2026, that it is extending its “no action” relief for affected climate reporting entities (CREs), adding five reporting periods with balance dates from March 31, 2027, to January 31, 2028.
The extension, however, comes with a clear caveat. In its September 29 update, the FMA stated there is “no certainty as to whether, or with what priority, this policy will be progressed by the incoming government.”
For brokers placing business with life and health insurers, that sentence is the most important line in the announcement.
New Zealand’s climate-related disclosures (CRD) regime has been narrowing since late 2025. Nine health and life insurers were earmarked for removal from the framework. Combined with 88 businesses already removed through earlier government decisions, around 67 entities will need to report once all legislative changes are in place – down from 164 originally.
General insurers are not part of this exemption. Their reporting obligations remain unchanged.
The legislative vehicle – the Financial Markets Conduct Amendment Bill (FMCAB) – began its second reading on February 10, 2026, but debate was interrupted and did not resume until April 2. It remained before Parliament without completing that reading when Parliament rose ahead of the election.
The government had announced health and life insurers would exit the regime. Without enacted legislation, that remains an intention, not a legal reality.
Read next: NZ climate reporting regime contracts as government rejects official advice
The FMA’s original no-action relief, which started June 19, 2026, covered the 2025/2026 reporting period. An August 4 update from the FMA clarified the last period under that original relief ran from January 1 to December 31, 2026.
The September 29 extension covers five further reporting cycles: periods starting April 1, July 1, and October 1, 2026, and January 1 and February 1, 2027. The reporting period beginning April 1, 2027 – carrying a lodgement deadline of July 31, 2028 – is not included.
FMA general counsel Liam Mason explained the rationale. “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.
The FMA was explicit on one point: “no action” is not a legal exemption. Its position does not prevent third parties from taking legal action against entities for the same conduct. Residual civil exposure remains, regardless of the regulator’s stance.
The FMA also flagged that any insurer choosing to publish climate statements voluntarily after a legislative change remains bound by the fair dealing provisions under Part 2 of the Financial Markets Conduct Act. Voluntary disclosure does not mean disclosure without legal accountability.
The sector’s push for removal from the CRD regime centred on cost. The Financial Services Council (FSC), which represents life and health insurers alongside fund managers and other financial service providers, put annual compliance costs at between $10 million and $15 million – with no demonstrable benefit for customers.
FSC chief executive Kirk Hope drew a clear line between life and health products and the purpose of climate reporting. “Health and life insurers do not insure homes, farms, or roads against floods and storms. They protect people when they get sick, can’t work, or when their family needs support. The previous regulations treated very different risks as if they were the same. That added compliance cost of $10-$15 million a year without clear value for New Zealanders,” Hope said.
Officials at the Ministry of Business, Innovation and Employment (MBIE) did not share that view. In a Regulatory Impact Statement, MBIE recommended against the exemption, warning it risked “weakening the overall integrity and effectiveness” of the CRD regime. The ministry’s preferred option was to keep health and life insurers in the framework. Cabinet chose otherwise.
The FMCAB was introduced by the current National-led government. Whether it proceeds after November 7 depends on which party forms the next government and the priority it assigns to the bill.
If the incoming government advances the FMCAB, the FMA said it will work with affected CREs on further relief depending on legislative timing. If the new administration does not progress the bill, the FMA said it will support a return to full compliance – while acknowledging affected entities may not be able to supply comparative data from the prior reporting year.
“If the incoming government’s policy is not to support the passage of the FMCAB, the FMA will work with climate reporting entities to ensure a smooth transition back to reporting, with the understanding that these entities may not be able to provide comparative information for the previous reporting year,” Mason said.
Read next: Climate risk is understood. Resilience plans still have barriers to overcome, Zurich says
The FSC’s $10 million to $15 million annual compliance cost figure is not an abstraction. It represents real resource allocation inside businesses that also set premiums, manage claims capacity, and determine product availability. Where that burden lands post-election has downstream effects on the market brokers work within.
If the FMCAB passes, affected insurers exit the regime permanently and the compliance infrastructure built over several years becomes a sunk cost. If the bill does not progress, those same insurers resume full reporting – likely without the prior-year comparative data that underpins meaningful climate disclosure.
General insurers sit outside all of this. Their CRD obligations are intact, and the FMA has continued to signal scrutiny over physical risk disclosure – relevant to the broader general insurance market regardless of which government is formed.
The FMA said it will engage with affected entities once the incoming government signals its policy direction.
