The Government is moving swiftly ahead with its plans to replace the Resource Management Act with three distinct pieces of legislation: the Natural and Built Environment Bill, the Spatial Planning Bill and the Climate Adaptation Bill.

While the future of the Climate Adaptation Bill depends on the outcome of the election in October, the Natural and Built Environment and the Spatial Planning Bills are already being forced through, both having passed their third readings in Parliament yesterday. The Government is focused on passing these bills into law before Parliament rises on 31 August.

So, what does this mean for businesses and specifically, insurers and insureds?

Some of the key changes relevant for insurers and their insureds are the increases in the maximum fines – $1m for individuals and $10m for bodies corporate. It also includes the introduction of a formal enforceable undertakings regime and grants regulators wider powers to recover their own costs, including those associated with a prosecution. Finally, and most importantly, a prohibition on indemnity for pecuniary penalties, monetary benefit orders or fines. This final change is quite radical and removes the current ability of insurers to cover fines imposed pursuant to the RMA.

The big question is just how long the new legislation will be in force for as opposition parties have already indicated that they will, if elected, repeal the new laws as soon as possible after the election. Notwithstanding this, insurers will need to look closely at the wording of their policies to ensure compliance with the new legislation when it becomes law.

Resources

The RMA is on the way out…so what next?

Fee Langstone