Public input has been invited on the Fire and Emergency
New Zealand Bill (FENZ Bill) to create a unified fire
service and on the regulations which will inform the
Submissions on both close on 18 August 2016.
The levy rate will be consulted on separately later this year.
The Bill is now before the Government Administration Committee
and is due to be reported back to the House on 5 January next year,
a date that seems almost certain to be changed as the House is
unlikely to be in session so early in the New Year.
The Bill will rename the New Zealand Fire Service Commission
Fire and Emergency New Zealand (FENZ) which will be funded
principally from levies. These will include insurance for material
damage as well as fire damage and will be subject to review every
In addition to the functions currently performed by the Fire
Service Commission, FENZ will also be responsible (where resources
responding to medical emergencies
performing technical rescues
providing assistance at crash scenes
responding to weather related and other natural hazard events,
FENZ is also tasked with developing a dispute resolution scheme
(including for levies), to be approved by the Minister.
Scope of regulations
The proposed regulations include:
the ability to set different fire service rates for residential
and non-residential users, and to cap levy payments
the removal of the levy exemption on a range of property (e.g.
notably forests and crops; electricity and telephone poles, lines
and cables; roading; ships; aircraft; dams; mines and quarries),
insurance information requirements for levy payers.
New levy regime and exemptions
The levy will be based on insurance covering physical damage to
- or loss of - property, rather than being limited to fire damage.
This change will come into effect on 1 July 2018. The rationale for
the change is that:
fire services also respond to non-fire related threats
it makes it more difficult to avoid contributions by separating
out fire insurance from other forms of insurance, and
it is relatively easy to administer.
A cap is intended to provide transitional relief to large
policy-holders (government agencies, big business) which may face
potentially significant levy increases.
A separate levy will be applied to motor vehicles weighing less
than 3.5 tonnes. This will insure against physical damage to the
vehicle and to a third party.
Currently there is a range of exemptions. The discussion
document proposes retaining them only for water reticulation
piping, offshore oil installations and cable and pipelines on the
The proposed test for allowing an exemption is that the Minister
is satisfied there is no potential for FENZ's services to be
required at the property.
Input is invited on whether other properties should also be
Insurance companies are now required to provide data only on
aggregate levy payments across different property types although
most voluntarily provide more detailed information on clients
paying levies over $1000 a year.
Four change options are proposed;
the status quo supported by a memorandum of understanding
between FENZ and the insurance sector (through the Insurance
Council and the Insurance Brokers Association)
annual audits of all insurance providers
a detailing of the disclosure required above the $1000
threshold (policy type, start and end dates, invoice date, amount
insured, insured's name and levy paid), and
a requirement that this information be provided on all levy
payments over $100 (rather than $1000). This is the
government's preferred option.
FENZ Bill is expected to commence on 1 April 2017 and the FENZ
structure to begin operation on 1 July. The implementation will be
phased in, ending in 2020. Further regulations may be made over the
course of the transition. These would also be opened for
Chapman Tripp's earlier commentary on the Bill is available
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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