Gay rights groups say some insurance companies are discriminating on the basis of sexual orientation.
Wellington Rainbow Network chairman Tony Simpson said big insurance companies were taking "almost a prurient interest" in people's sex lives.
One man was turned down for life insurance because he was gay and thus "at higher risk" of contracting HIV/ Aids.
A gay couple who applied for health insurance were confronted with a supplementary questionnaire and subjected to "a series of highly personal and intrusive questions about their actual sexual practices, which were entirely inappropriate on privacy grounds".
The group has made a submission to the Human Rights Commission, which is reviewing its 10-year-old guidelines on insurance and the Human Rights Act to help consumers and insurers understand their rights and responsibilities.
Mr Simpson said the Civil Union Bill had presented insurance companies with new situations, such as people seeking additional cover for same-sex partners.
"Of course insurers have the right to make actuarial assessments, but these categories shouldn't be developed artificially and they have to be handled with a great deal of sensitivity."
Labour MP Tim Barnett said the insurance industry had been "slower to let go of discriminatory practices" than the rest of the private sector.
He had personally dealt with four cases in recent years through his Christchurch electoral office.
"In most cases, people were not discriminated against because of their 'risky' lifestyle, but because of an unfounded assumption that gay sex is inherently riskier."
Wellington Gay Welfare Group spokesman Ross Kelly said it was unfair that people living with HIV/Aids could be denied insurance cover for travel or a mortgage.
"With advances in medicines and treatments, and the increasing understanding of healthy living, many perhaps formerly valid impediments to insurability are no longer justifiable."
New Zealand Aids Foundation executive director Rachael Le Mesurier said she was concerned that the New Zealand insurance industry appeared to penalise people for getting tested for HIV.
"Insurance companies here tend to regard the fact someone has had a test – regardless of the outcome – as evidence they are 'a poor risk', instead of regarding them as being responsible."
Regulators in Australia and Britain have outlawed questioning about HIV tests.
Investment Savings and Insurance Association chief executive Vance Arkinstall said the industry had "moved on considerably" but said there was room for improvement.
"We could be more sensitive about how we ask the questions."
However, he defended the right of insurers to ask certain questions of individuals seeking cover.
"From an underwriting point of view, there are additional risks attached to the gay lifestyle."
A revised draft of the guidelines will go out to key stakeholders this week. They will have till mid-July to comment, and publication of the final document is planned for September.