The Reserve Bank – Te Pūtea Matua – is today welcoming views on an interim Solvency Standard for insurers, which will
determine the minimum amounts of capital that insurers must hold.
The interim standard is needed in order to take account of upcoming changes to the accounting rules (IFRS 17) and to
incorporate feedback on our current solvency standards. It has been designed so that policyholders can be comfortable
that an insurance company has enough funds to meet its promises to policyholders, even if it fails, Deputy Governor and
General Manager of Financial Stability Geoff Bascand says.
“Through our review of the standard we have modified some of the ways that we require insurers to calculate their
capital needs. This is to ensure greater consistency and clarity in our requirements, and to deal with new accounting
standards for the insurance industry,” Mr Bascand says.
“This will bring our method for capturing risks into line with international standards. We will undertake further
analysis, in consultation with the industry, as we are keen to understand the capital impact on insurers. We strongly
encourage them to engage with the consultation.”
The interim solvency standard is part of a multi-year review of the Insurance Prudential Supervision Act (IPSA) 2010 and
its associated Insurer Solvency Standards. The Interim Solvency Standard consultation will be open for 10 weeks until 1
October. The standard will take effect from early 2022 and be in-force for around three years. Its contents have been
informed by our supervision of the insurance industry and consultation with industry representatives and the general
public.
“The consultations provided us with insightful feedback and we thank all of those who took the time to provide their
thoughts and ideas,” Mr Bascand says.
“We look forward to continued engagement with both the public and industry stakeholders as our work on this important
regulation progresses.”
The interim solvency standard consultation is being released alongside the feedback received from consultations on the
structure of the Solvency Standards and IFRS 17 (the new accounting standard for insurance contracts); and on the Scope
of the Insurance (Prudential Supervision) Act 2010 and treatment of overseas insurers; together with our responses to
the public submissions received.More information:How to have your say: Draft interim solvency standard Explanatory Note (PDF 1MB)Exposure draft of the Interim Solvency Standard (PDF 1.9MB)Review of Insurance Solvency Standards: Consultation on Structure and IFRS 17 Feedback Statement (PDF 860KB)Review of Insurance Solvency Standards: Consultation on Structure and IFRS 17 – full submissions (PDF 39MB)Review of the Insurance (Prudential Supervision) Act 2010: Consultation on Scope of the Act and Overseas Insurers
Feedback Statement (840KB)Review of the Insurance (Prudential Supervision) Act 2010: Consultation on Scope of the Act and Overseas Insurers – full
submissions (PDF 19MB)Reserve Bank invites feedback on scope of Insurance Act and structure of Solvency Standards – November 2020Reserve Bank relaunches Insurance Act review – October 2020