The Reserve Bank of New Zealand (RBNZ) has launched dual consultations on the scope of the Insurance Prudential Supervision Act (IPSA) 2010 and associated Insurer Solvency Standards.
Two consultation papers are now open for feedback from industry stakeholders. According to the central bank, these are part of a series of consultations that will cover different aspects of New Zealand’s insurance regulation as part of the multi-year review process.
To shed more light on the issues, a webinar discussing the consultations will be held on December 14.
“Consultation on the scope of IPSA considers the definitions of ‘contract of insurance’ and ‘carrying on business in New Zealand’,” RBNZ deputy governor and general manager of financial stability Geoff Bascand said.
“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 contains rules regarding foreign-owned insurers.
Meanwhile, the Insurance Solvency Standards determine the minimum amounts of capital that insurers must hold. According to RBNZ, these standards have been designed so that policyholders can be confident that the insurance company has enough funds to meet its obligations, even in the face of unexpected adverse outcomes. This consultation, it added, 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. Another consultation regarding the required level of capital will be held later.
“We welcome feedback from industry participants, policyholders and other interested parties on either or both of these consultations,” Bascand said. “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.”
