Many in the insurance industry are currently involved in preparing to comply with upcoming changes to the
Fire and Emergency NZ (FENZ) levy, whether that be staff training about the changes or making sure internal systems will be ready.
IBANZ members place about half of all general insurance premiums, which means our membership is responsible for collecting a significant proportion of all FENZ levy monies received on behalf of the government.
Hon Brooke van Velden has portfolio responsibility for FENZ through her Internal Affairs portfolio. CoverNote recently had the opportunity to put some questions to Minister van Velden about the role of brokers as FENZ levy collectors and whether there are any plans for any further FENZ levy review.
Broker acknowledgement
Minister van Velden began by expressing her gratitude to IBANZ members for the role they play in supporting the work of Fire and Emergency in New Zealand.
“I want to thank IBANZ members for their continued commitment to collecting the FENZ levy – the levy funds a vital service that helps keep communities safe. Your efforts ensure Fire and Emergency has the resources it needs to respond when New Zealanders need it most.
“I also appreciate the work you are doing to support a smooth transition to the updated levy arrangements. This change is no small task, especially in an environment of more frequent severe weather events and with other regulatory changes beyond the Fire and Emergency levy. Your ongoing commitment is critical to managing these challenges.”
Strong working relationships
Asked how the Government is ensuring that the regulatory framework for insurance intermediaries remains proportionate and doesn’t create unnecessary compliance burdens - particularly for small and medium-sized brokerages – Minister van Velden pointed to the work done on the FENZ levy.
“The Government worked closely with sector representatives, including IBANZ, to understand the operational realities and reduce unnecessary complexity. For example, when concerns were raised about the original proposal for mixed-use property levy allocation, I agreed to simplify the approach to make it workable.
“I’m encouraged by the stronger working relationships that insurance sector representatives have developed over the past 18 months with Fire and Emergency New Zealand officials and the Department of Internal Affairs. I hope this will continue as those good, practical conversations are what’s needed to ensure the regulatory system will work as it should.”
Future model review?
The industry has long advocated to replacing the FENZ levy with a fairer, more efficient funding model. CoverNote asked Minister van Velden whether the Government would consider a review of the FENZ funding model in future.
“I understand the concerns IBANZ and others have raised about the insurance levy model and the desire for a funding approach that is fair and efficient. At this stage, the Government does not plan to review the funding model for Fire and Emergency.
“A review of the funding system was undertaken between 2019 to 2021, where the outcome was to retain the insurance levy model. However, the Government will continue to monitor the system’s performance and will remain open to feedback from the insurance sector and the wider public.”
FENZ levy guide coming
The upcoming changes to the FENZ levy are scheduled to take effect from 1 July 2026. However, the industry is calling for these to be implemented by 1 April 2026 to align better with insurers’ policy renewal cycles and reduce the administrative burden of mid-year changes.
The Insurance Council of New Zealand (ICNZ) and IBANZ are working with FENZ on a new Fire and Emergency New Zealand Levy Guide to help insurance companies and brokers understand the upcoming changes.
The Guide is a proactive step to help the industry prepare for the upcoming changes in 2026 and will include practical worked examples to assist with compliance. The guide is expected to be released end-November or start of December. It will be shared via IBANZ News, in which IBANZ members will receive an emailed copy.
