tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, June 2nd, 12:31PM

News

rss
Latest Headlines

RBNZ says no change in approach on Resolution Life's AMP purchase

The Reserve Bank says it hasn’t changed its approach to applications for changes of ownership of life insurance companies and nor has there been any change in New Zealand insurance law or regulations since October 2018.

Friday, July 19th 2019, 7:41AM

by BusinessDesk

That was when AMP announced the sale of its Australian and New Zealand life business to Bermuda-based British firm Resolution Life for A$3.3 billion.

That sale collapsed earlier this week because RBNZ insisted that Resolution Life agree to have separate, ring-fenced assets held in New Zealand for the benefit of the New Zealand policyholders.

RBNZ says in a statement released late today that when AMP and Resolution Life first made contact with it in September last year, it "promptly made them aware of New Zealand regulatory requirements.

“Their proposed transaction would constitute a fundamental change in the nature of AMP Life’s business. AMP would no longer accept new business and the scale of its business would substantially shrink over time. Existing life policies would be ‘run-off’ to expiry over a period of some decades,” the statement says.

“The proposed transfer needs to comply with insurance regulatory requirements” in both Australia and New Zealand and RBNZ has been in frequent communication with APRA “and have a mutual respect of our roles,” it says.

It notes that Resolution Life didn’t formally apply for RBNZ approval until June 7.

AMP has been selling life insurance policies in New Zealand since 1854 and has been operating under an exemption allowing it to operate as a branch of the Australian parent and thus not needing to hold capital in New Zealand.

While it is attempting to renegotiate the sale, AMP has said subsequent events have reduced the businesses’ value by about A$700 million and perhaps more.

The Australian Financial Review had accused RBNZ of making “a change in a 150-year-old regulatory practice for life insurance companies in New Zealand through an out-of-the-blue ASX announcement.”

The AFR also said RBNZ’s actions also demonstrated a “lack of trust in the regulatory oversight of AMP Life” by the Australian Prudential Regulation Authority.

AMP market value dropped about A$1 billion the day the news broke, with the shares falling as much as 17.6 percent to A$1.7725. They recently traded at A$1.78.

New Zealand Prime Minister Jacinda Ardern lunched in Melbourne today with investors in New Zealand, an event the media was excluded from, amid reports that Australian investors were shocked by the RBNZ’s stance on AMP.

RBNZ says the New Zealand regulations relate to the interests of policyholders, solvency standards, financial strength ratings, overseas policyholder preference, risk management, actuarial requirements, financial reporting, statutory funds and governance.

The bank says exemptions like AMP’s “are granted on the basis that standards applicable to Australian incorporated insurers are broadly equivalent to New Zealand standards. In some circumstances, standards for Australian incorporated insurers favour Australian policyholders over New Zealand policyholders, including during ‘run-off,’” it says.

Tags: AMP Resolution Life

« CFP numbers predicted to lift(The Wrap] The anatomy of the AMP shambles »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.55 3.89 3.99
AIA Special - 3.05 3.39 3.69
ANZ 4.44 3.29 3.45 3.85
ANZ Special - 2.79 2.95 3.35
ASB Bank 4.45 3.35 3.19 3.85
ASB Bank Special - 2.85 2.69 3.35
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - 2.79 ▼2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.39 ▼3.29 ▼3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 2.80 3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.80 2.89 3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 4.40 2.95 2.95 3.69
Kainga Ora 4.43 ▼3.29 ▼3.39 ▼3.85
Kiwibank 4.40 3.74 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - 2.65 2.79 3.25
Liberty 5.69 - - -
Lender Flt 1yr 2yr 3yr
Napier Building Society - - - -
Nelson Building Society 4.95 3.75 3.99 -
Pepper Essential 5.18 - 4.98 4.98
Resimac 3.49 3.45 3.39 3.69
RESIMAC Special - - - -
SBS Bank 4.54 4.85 5.05 5.49
SBS Bank Special - 2.99 3.05 3.69
The Co-operative Bank - Owner Occ 4.40 ▼2.79 ▼2.95 ▼3.39
The Co-operative Bank - Standard 4.40 ▼3.29 ▼3.45 ▼3.89
TSB Bank 5.34 3.59 ▼3.59 4.19
TSB Special 4.54 2.79 ▼2.79 3.39
Lender Flt 1yr 2yr 3yr
Wairarapa Building Society 4.99 3.95 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.79 ▼2.69 ▼2.79
Median 4.55 3.32 3.39 3.69

Last updated: 28 May 2020 10:38am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com