In a statement on its Facebook page, the association said it had "lost one of its family members".
"Details of exactly how the incident happened are still under investigation but it occurred in the braided section of the river about 10 to 15 minutes above the area known as 'the pylons'," it said.
"Our heartfelt condolences go out to Duayne's wife ... and their family."
The driver of the boat escaped without injury, the statement said. Duayne Terry was examined by paramedics, who quickly arrived at the scene.
Association president and fellow competitor John Derry expressed his condolences on behalf of all teams, saying: "Despite us all knowing the dangers of competitive motorsport it is never easy to deal with the reality of an accident that takes away one of our family or friends."
As a mark of respect racing was cancelled for the remainder of the day with teams expected to recommence competition on Tuesday south of Christchurch on the Rakaia River. The marathon ends in Queenstown next Saturday.
It is just the second day of the week-long world championship competition, taking place on eight rivers across the South Island.
Today's event was the Waimakariri Up and Down, which followed the Circuit Time Trail yesterday.
Insley operated a horse-trekking business with his wife, Deana Insley.
She described him as an "awesome man to be by my side" on their business website.
She wrote that Insley originally came from a family of shepherds and musterers in the Central North Island and had previously worked as a commercial jet boat driver and digger operator.
"He loves to race jet boats as a sport, having picked up two New Zealand champion titles plus a world title last year. We set off to Monaco to pick up his trophy earlier this year and this is where he proposed."
Deana wrote that she was able to fulfil her dream and ride her favourite horse into the ceremony to get married to Insley with their children in 2015.
NZJBRRA spokesman Paul Mullan earlier said the man who died was a Kiwi and was well known within the racing community.
Mullan said the accident had hit people hard and he believed some of the man's family members were at the race. However it was unlikely there were spectators at the area where the accident happened because it was difficult to access.
The man was completing leg 2 of the race, which was a 140km lap.
"Everybody is devastated. It's a close-knit family, the racing fraternity," Mullan told the Herald.
"Everybody on all sides of the globe who are involved in racing know somebody who knows this person ... It's an absolute tragedy."
Many took to social media paying tribute to Insley and affectionately nicknaming him "Dweeb". One said he died doing what he loved.
"Sad day for his family, his driver & friends, officials & all the racing community. Race on in the sky Duayne. [He] passed doing what he loved, respect & condolences to all."
Another said risk and reward are both in motorsport but it's always a tragedy when a fellow member is lost.
Mullan did not know why the accident had occurred and said the weather conditions were perfect.
OFFICIAL RELEASE
Marathon - leg 2 marred with tragedy
It is with deep sadness we must acknowledge the loss of one of...
Posted by New Zealand Jet Boat River Racing Association on Saturday, 14 October 2017
Fatal accidents were rare in the sport and they had stringent safety standards such as mandatory roll cages and full harnesses, said Mullan, who has been involved in jetboating for 30 years.
The annual race alternates between being held in New Zealand, America, Mexico and Canada. But the New Zealand one is often the biggest because the country is known for "being a pioneering part of the world for jetboating", Mullan said.
The marathon race consists of 15 legs to be held over the week. The fastest boat overall will win in four classes.
Mullan hoped racing would resume on Tuesday but said the organisers would determine tonight whether the marathon would be continued.
Maritime New Zealand says police are leading the investigation on behalf of the Coroner. Spokesman Vince Cholewa said Maritime NZ will help police as required.
