What the Fair Insurance Code is
The ICNZ Fair Insurance Code is a voluntary industry code published by the Insurance Council of New Zealand. Most general insurers in NZ are ICNZ members and have committed to the Code. Life insurers (where most funeral cover sits) operate under the parallel Financial Services Council codes. Funeral cover is usually issued under a life insurance licence — so both frameworks can apply depending on the insurer.
The Code isn't legislation. But it sets the standards member insurers commit to when selling, administering, and paying claims — and breaches can be escalated to the Insurance & Financial Services Ombudsman (IFSO) for binding determination.
Where funeral cover sits in the framework
Funeral insurance in NZ is typically a small life-insurance product — sum-insured usually in the $5,000–$30,000 range, paying on death (and sometimes terminal illness via an Accelerated Funeral Benefit). It's regulated under:
- Insurance (Prudential Supervision) Act 2010 — prudential supervision via the RBNZ.
- Insurance Law Reform Act 1977 — non-disclosure rules.
- CoFI (Conduct of Financial Institutions) regime — fair-conduct standards now enforced by the FMA.
- Voluntary ICNZ / FSC codes — industry self-regulation on top of the legislation.
Claims-handling timeframes
The Code commits ICNZ members to handle claims promptly and fairly. For funeral cover specifically, the practical timeline is:
- Notification: insurer acknowledges receipt of claim and tells you what's needed (typically death certificate + completed claim form).
- Assessment: insurer decides on the claim — many guaranteed-acceptance funeral products pay within 24–48 hours of receiving documentation; underwritten products may take longer if the death is within the policy's contestability period.
- Reasons in writing: if a claim is declined, the insurer must provide the reasons in writing — required under both the Code and the FMA's CoFI fair-conduct obligations.
Waiting-period disclosure
Most NZ funeral cover policies have a waiting period for natural-cause death — typically 12–24 months. The Code requires insurers to set out the waiting period clearly in the policy documents and in pre-sale material. If your funeral product has a 24-month waiting period and you haven't been told plainly, that's a disclosure breach you can raise with the insurer and escalate to IFSO if unresolved.
Accidental death is usually covered from day one — that's important for buyers worried about a "gap" in cover during the waiting period.
Dispute escalation
If you have a complaint about a funeral-cover claim or sale process:
- Internal complaints process — every NZ insurer must have one. Lodge in writing; they have a defined window to respond (typically 40 working days).
- External dispute resolution — if the internal process doesn't resolve it, escalate to the relevant external scheme. Most NZ life insurers are members of either IFSO or FSCL (Financial Services Complaints Limited). Membership is mandatory under the Financial Service Providers (Registration and Dispute Resolution) Act 2008.
- FMA — if the dispute concerns mis-selling or breach of CoFI fair-conduct standards, file a complaint with the FMA in parallel.
IFSO determinations are binding on the insurer but not on you — you can accept the determination or take the matter to court.
Where to look it all up
Editorial summary only — not personalised financial advice. Site operated by Evolve Group Limited (FSP711891), a Financial Advice Provider licensed by the FMA.