RB gears up to regulate insurance sector

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Central bank Governor Alan Bollard confirmed staff numbers were increasing as the Reserve Bank prepares to take on more regulatory roles, such as the oversight of insurance companies.

Friday, October 23rd 2009, 9:20AM

by Paul McBeth

At a Parliamentary select committee hearing earlier this week, Bollard told MPs staff had increased in response to the increased burden of regulating non-bank deposit takers and insurance companies.

"That's been the response for some of the increase in staff over the past year, and there's still a bit more to come on that," Bollard said. "We're trying to carry that out without changing the broad approach we have - that we're not an intrusive regulator, we're still a light-handed regulator."

A draft insurance bill was put out for consultation in April, and Parliament is expected to formally introduce the insurance prudential supervision bill soon. This will see the central bank take on the role of regulating insurance companies.

The bank boosted its staff numbers to 237 in the latest financial year from 223 in 2008 as it prepares to take on extra prudential duties for insurance companies, lenders, and non-bank deposit takers. 

The main objectives of the bill are to promote a sound and efficient insurance sector and boost public confidence in insurance providers through establishing a licensing system and imposing prudential requirements to be monitored and enforced by the central bank.

Paul is a staff writer for Good Returns based in Wellington.

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