The Insurance Council has taken Christchurch City Council to the High Court in a judicial review of what it claims are overly strict building standards.
After the September 2010 earthquake, the city council raised the minimum seismic strength requirements for some buildings from 33% to 67% of the new building standard.
The Insurance Council believes the change, made five months before the earthquake on 22 February 2011, did not give insurers enough time to adjust their policies to take account of the new rules.
In his opening statement, Insurance Council lawyer David Goddard said the city council's policy was unlawful because it went beyond what was allowed by the Building and Housing Act. The Act requires buildings to be at least 34% of the code, and states owners can't be forced to strengthen them further.
Mr Goddard argued that the council can relax but not tighten the requirements of the Act.
"A person carrying out building work can't be required to do more. The code sets standards; they can be relaxed in certain circumstances; they cannot be ratcheted up."
But the lawyer representing the city council, Duncan Laing, told the court the council's policy reflects the increased seismicity in the city and is enforced only where practicable.
The Gisborne District Council is the only other local body enforcing a similar policy, and the Insurance Council says it will decide whether to look at Gisborne's rules, once this is resolved in Christchurch.
The judge has reserved his decision.
Meanwhile, the Government is considering recommendations made by the Canterbury Earthquakes Royal Commission regarding changes to the rules governing quake-prone buildings.