The Reserve Bank of New Zealand (RBNZ) has issued the second amendment to its Interim Solvency Standard 2023, which will apply to all relevant insurers starting March 1, 2025.
The update aims to refine the existing framework to better align with its original policy goals without introducing additional capital requirements.
The RBNZ oversees the prudential regulation of New Zealand’s insurance sector, setting standards to ensure insurers maintain sufficient capital buffers to manage significant financial risks.
The latest amendment is part of a broader review of solvency standards initiated in 2020 to address the implementation of NZ IFRS 17, the accounting standard for insurance contracts.
The second amendment addresses technical issues identified during the application of the Interim Solvency Standard in 2023. The changes aim to clarify key provisions while ensuring the policy framework remains stable and consistent.
RBNZ deputy governor Christian Hawkesby highlighted the purpose of the changes, stating that the amendment ensures that the Interim Solvency Standard is fit for purpose, providing a strong regulatory framework while preserving the original policy intent.
“By addressing key technical areas, we have taken the necessary steps to ensure the solvency standard continues to meet the needs of the industry and remains aligned with the evolving financial landscape,” he said.
Specific revisions include:
The RBNZ noted that these updates are designed to maintain insurers’ existing capital levels and are not expected to lead to increased premiums for policyholders.
The amendment follows an extensive consultation process, during which the RBNZ sought input from industry stakeholders, including insurers and professional bodies.
Eight submissions were received, and this feedback informed the final version of the amendment.
“We are grateful to the industry for its active participation throughout the consultation process. Their valuable feedback has played a pivotal role in refining the amendment and ensuring that it addresses the core needs and concerns of stakeholders,” Hawkesby said.
The RBNZ also released a feedback statement summarising industry responses and detailing how concerns were addressed in the final changes.
The solvency standard update is part of the RBNZ’s ongoing efforts to modernise financial regulations in response to evolving risks and international developments.
As part of its regulatory agenda, the Reserve Bank is also preparing to implement the Deposit Takers Act and the Depositor Compensation Scheme in mid-2025, further strengthening the resilience of New Zealand’s financial system.
