The Reserve Bank of New Zealand (RBNZ) will be relaunching the review of the Insurance (Prudential Supervision) Act (IPSA) in October, the central bank says in a statement.
The review began with an industry consultation in 2017 and was set to resume in March this year, but was delayed in line with the regulatory relief implemented to free up the Reserve Bank and industry participants to support our economy and tackle the challenges created by COVID-19.
“Maintaining a sound and efficient insurance sector is important for New Zealand,” deputy governor and general manager of Financial Stability Geoff Bascand said in an address to the Insurance Council of New Zealand.
“Customers expect to be able to insure their homes and possessions and obtain life and disability insurance, and businesses utilise a range of insurance products to protect their assets and business interruption exposures,” Mr Bascand said.
“There are approximately 90 licensed insurers operating in New Zealand, and the sector is highly diverse, ranging from large international companies to tiny specialised entities providing services to particular employee or professional groups. The sector covers home and contents, motor vehicle, travel, life, health, disability, credit, income protection, business interruption, and other products or services.”
The original IPSA was enacted in September 2010 to bring New Zealand up-to-date with international standards for prudential regulation. The reasons for enacting IPSA have not changed, and it is good regulatory practice to review legislation to ensure it is working effectively and update it for the lessons learned over the past 10 years, Mr Bascand says.
A policy paper outlining the resumption of the IPSA Review, and objectives and topics to be covered, will be published in early October. It will provide an updated overview explaining objectives, topics to be covered and an indicative timetable. At the same time, the RBNZ will also release a consultation paper on principles to guide the review of solvency standards.