The Insurance Council has told a High Court hearing the Christchurch City Council acted unlawfully by setting stricter building standards for some commercial buildings.
After the September 2010 earthquake, the city council raised the minimum seismic strength requirements for some commercial buildings from 33% of the new code to 67%.
The Insurance Council believes the change, which was made five months before the catastrophic February 2011 quake, didn't give insurers enough time to adjust their policies to take account of the new rules.
In his opening statement, the lawyer representing the Insurance Council, David Goddard, said the policy was also unlawful.
"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."
The Building Act requires buildings to be at least 34% of the code, and states owners can't be forced to strengthen them further.
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.