The Reserve Bank – Te Pūtea Matua is today launching dual consultations on the scope of the Insurance Prudential
Supervision Act (IPSA) 2010 and associated Insurer Solvency Standards.
Prudential regulation of insurers aims to ensure that insurance companies understand and manage their risks well so that
the public can have confidence in the insurance sector and the sector can remain sound and efficient. These
consultations provide the opportunity for people to shape parts of the regime to ensure it is modern, efficient and
fit-for-purpose.
Two consultation papers are open for feedback from today. These are part of a number of consultations which will cover
different aspects of New Zealand’s insurance regulation as part of the multi-year review process.
“Consultation on the scope of IPSA considers the definitions of ‘contract of insurance’ and ‘carrying on business in New Zealand’,” Deputy Governor and
General Manager of Financial Stability Geoff Bascand says.
“These definitions determine which entities are required to obtain a license under the Act. The consultation paper
discusses whether the definition of insurance contracts remains sufficiently broad to cover new forms of business such
as online insurance start-ups, and whether it is clear enough to give industry and the public the guidance they need.”
The consultation paper also covers rules about how overseas insurers are treated. “We are seeking feedback on how best
to strike a balance between the benefits for consumers from having overseas insurers competing in the New Zealand
market, and ensuring that New Zealand policyholders are properly protected,” Mr Bascand says.
The Insurance Solvency Standards determine the minimum amounts of capital that insurers must hold. The solvency standards have been designed so that
policyholders can be comfortable that, even if unexpected adverse outcomes occur, the insurance company has enough funds
to meet its promise to policyholders.This consultation looks at how the Standards are structured and applied to
insurers, as well as canvassing views on how they can accommodate the new accounting standard for insurance contracts –
IFRS 17. The required level of capital will be consulted on at a later stage.
“We welcome feedback from industry participants, policyholders and other interested parties on either or both of these
consultations. We’ve created two simple summaries to help people understand these consultations and provide their
thoughts. Feedback will be crucial to helping us shape the regime in an efficient and effective matter,” Mr Bascand
says.
The Reserve Bank will be hosting a webinar to discuss the consultations on Monday 14 December. To express your interest
in participating, please email rbnz-info@rbnz.govt.nz.More information:Non-technical summary: Review of the Insurance (Prudential Supervision) Act 2010 Options Paper 1: Scope of the Act and
Overseas Insurers Consultation (PDF 308KB)Consultation paper: Review of the Insurance (Prudential Supervision) Act 2010 Options Paper 1: Scope of the Act and
Overseas Insurers (PDF 1.2MB)Non-technical summary: Review of Insurance Solvency Standards: Structure and IFRS 17 (PDF 298KB)Consultation paper: Review of Insurance Solvency Standards: Structure and IFRS 17 (PDF 2MB)Reserve Bank relaunches Insurance Act review – October 2020Speech: Promoting the Soundness and Efficiency of our Insurance Sector: Recommencing the IPSA and Solvency Standard
Review – September 2020