While home owners need protection, the Government can\u2019t force the private sector to provide warranties\/insurance. The risk of homeowners being left exposed has held previous governments back from changing the liability regime.<\/p>\n
However, the Ministry of Business, Innovation and Employment (MBIE) says that since the proposed law change has been announced, it has heard from product providers and underwriters in Australia, London and Paris that may be interested in coming to New Zealand.<\/p>\n
\u201cThere are positive signs that there is potential increased competition coming in to provide those schemes,\u201d MBIE manager for systems and markets policy, Michael Warren, told Parliament\u2019s transport and infrastructure committee this month, cautioning talks were still high level and anecdotal at this stage.<\/p>\n
Neither Warren nor Building and Construction Minister Chris Penk disclosed which companies were expressing interest in New Zealand.<\/p>\n
The global reinsurance market is currently deemed to be soft, making it relatively easy for insurers to get cover at a reasonable price.<\/p>\n
However, as IAG New Zealand chief executive Phil Gibson explained earlier this month, big claims events could change this<\/a>.<\/p>\n \u201cTypically, capital continues to come in until there is some global calamity; something big happens, boom, and then it pulls away and the market hardens up and you see prices rise and it\u2019s harder to get cover,\u201d Gibson said.<\/p>\n In 2019, the Insurance Council of New Zealand told MBIE: \u201cCurrently, builders\u2019 warranty insurance in New Zealand is sold by just two providers that are backed by one syndicate at Lloyd\u2019s of London. It should not be assumed that Lloyd\u2019s will be able to provide further capacity in the future, or even to maintain the current level of capacity.<\/p>\n \u201cLloyd\u2019s capacity for this type of long-tail business can vary from year to year and is influenced by claims performance, changes in the global financial markets, and regulatory requirements and legislative changes both here and in the United Kingdom.\u201d<\/p>\n Lloyd\u2019s did in fact exit the market, returning to underwrite an offering by Stamford Insurance.<\/p>\n