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Insurance Council of New Zealand urges government to strengthen Resource Management Act

Insurance Council of New Zealand urges government to strengthen Resource Management Act

The Insurance Council of New Zealand (ICNZ) is urging the government to ensure that changes to the Resource Management Act (RMA) will protect communities by preventing construction in high-risk areas.

The government’s planned replacement of the RMA in Phase 2 includes changes that local councils must implement. These changes focus on developing a national strategy for managing natural hazards.

We support growth where natural hazard risk is well-managed. However, allowing development in high-risk locations puts people in danger and leads to worse outcomes for New Zealanders

Kris Faafoi, ICNZ’s CEO

This would give councils the power to decline land-use consents or impose conditions in areas with significant risk from natural hazards.

Faafoi stressed the need for long-term planning to ensure broad access to insurance. “This requires land-use planning that avoids new developments in areas prone to natural hazards. If risk levels rise too high, insurance may become unaffordable or unavailable, impacting property values and the housing market. This, in turn, puts pressure on the government to fund protective measures or compensate property owners,” he noted.

He pointed to the severe weather events in early 2023, which caused significant damage across New Zealand’s North Island.

Over NZ$3.8bn ($2.4bn) was paid out in insurance claims, with additional billions required to repair roads and infrastructure.

Faafoi highlighted the importance of establishing a national direction. A consistent approach to managing natural hazards will help ensure that developments occur in safer areas.

This will boost economic stability, strengthen community resilience, and offer homeowners and businesses assurance that insurance will be available when needed.

New Zealand’s vulnerability to natural hazards is well-documented. The Climate Change Commission has reported that 750,000 people and 461,000 buildings face risks from coastal inundation or inland flooding, threatening assets worth billions of dollars.

Nataly Kramerby Nataly Kramer