Insurance rules get review
Regulation governing the insurance sector in New Zealand is to be reviewed.
Wednesday, April 13th 2016, 11:41AM
by Susan Edmunds
Toby Fiennes
The Insurance (Prudential Supervision) Act was introduced in 2010 and was the first framework for regulation and supervision of the insurance industry.
It introduced licensing for insurers.
Reserve Bank head of prudential supervision Toby Fiennes said the Act had had a positive effect on the soundness of the industry and had generally worked well.
“However, it is over five years since IPSA came into force and this review will examine whether the legislation and associated regulations are working as intended,” he said.
Partners Life managing director Naomi Ballantyne said it seemed the review was linked to the time the Act had been in place, not any direct concerns about how well it was operating.
“It should not be of concern to anyone and may in the end deliver something that is slightly easier to comply with in terms of reporting requirements and that sort of thing."
She said Partners Life was still learning what was required of the Act. “We provide information and they come back and say ‘that’s not quite what we meant’. I think it’s working; I don’t see any issues or companies behaving badly. I don’t see anything in the Act that needs to change particularly. I suspect there will be tweaking to make it work more easily for the regulators to get what they need to supervise and for the companies to make it clearer what they are asking for.”
The review will consider whether the Act provides a regime that is cost-effective and risk-based, and which promotes the soundness and efficiency of the insurance sector.
It will consider how the New Zealand regime compares with international guidance and other Reserve Bank-administered legislation.
The Reserve Bank plans to publish an issues paper in late 2016 and seek feedback from the public and stakeholders.
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