Insurance Sector

Introduction to Parliament of the Insurance (Prudential Supervision) Bill

3 November 2009

The Insurance (Prudential Supervision) Bill was introduced in Parliament on 29 October 2009 and will shortly be given its First Reading, with the usual ensuing parliamentary processes including Select Committee to follow in due course.

The Bill can be accessed via the government legislation or parliament websites as shown below, or may be purchased in hard copy from Bennett’s Bookshop.

http://interim.legislation.govt.nz/bill/browse.aspx

http://www.parliament.nz/en-NZ/PB/Legislation/Bills

Insurance (Prudential Supervision) Bill – draft for consultation

20 April 2009

The Reserve Bank announced the release of a draft Insurance (Prudential Supervision) Bill for stakeholder consultation. This draft Bill reflects policy approvals provided by Cabinet in December 2007 and August 2008, and is being released for consultation with an expectation that respondents will focus on legal, drafting and operational issues. View the explanatory note and the draft Insurance (Prudential Supervision) Bill.

Release of Insurance Prudential Supervision Cabinet Paper

22 August 2008

Following recent approval by Cabinet, the Reserve Bank is today releasing a Cabinet Paper (PDF 255KB) which confirms policy positions relating to the matters discussed in the Bank's May Consultation Paper.

This latest paper, plus the earlier Cabinet Paper from December 2007, will form the basis from which a new Insurance (Prudential Supervision) Bill will be drafted. The Bank intends to continue its stakeholder engagement approach prior to the anticipated introduction of the Bill to parliament during 2009.

Insurance Prudential Supervision - Consultation Paper

27 May 2008

The Reserve Bank has released a Consultation Paper seeking input on certain issues regarding the Bank’s proposed new responsibilities for the prudential regulation of the insurance sector.

The Reserve Bank invites responses to the questions raised in the Consultation Paper by 20 June 2008.

Following consultation, the Reserve Bank will in July 2008 seek agreement from Cabinet to proposals in the above areas. The legislation will be developed over the remainder of 2008.

Review of financial products and providers including non-bank deposit-takers

17 December 2007

Finance Minister Michael Cullen today announced Cabinet decisions regarding a new prudential regulatory framework for insurance. The Reserve Bank welcomed the Cabinet decisions in a news release today.

The Bank’s role as regulator and supervisor of the insurance sector will include licensing insurers and enforcing disclosure requirements, including a mandatory rating of an insurer’s financial strength.

For more detailed information on the key features of the new arrangements please see Questions and Answers on Insurance, the Cabinet Paper and the Regulatory Impact Statement (PDF 258KB).

19 June 2007

The Reserve Bank in a news release welcomed the Cabinet decision for the Reserve Bank to be the single prudential regulator for New Zealand, as part of the Review of Financial Products and Providers. For more detailed information on key features of the new arrangements please see “Questions and Answers on Proposals for the Regulations of Non-Bank Deposit Takers”. For the Cabinet decisions included in the Review of Financial Products and Providers please visit the Ministry of Economic Development's website. For the Cabinet decision regarding the Reserve Bank becoming the single prudential regulator please visit the Treasury website.

31 August 2006

Commerce Minister Hon Lianne Dalziel today released a series of nine discussion papers as part of the Government’s review of financial products and providers. The papers propose a framework of regulation for the non-bank financial sector.

You can access the papers at http://www.med.govt.nz/templates/ContentTopicSummary____22180.aspx

6 September 2005

An officials' report to the Minister of Commerce on the Review of Financial Products and Providers has been released publicly. The report is part of the broad-based review of the financial sector regulatory framework being undertaken by the government. The key objective for the review is to develop an effective and consistent framework for the regulation of non-bank financial institutions, financial intermediaries and financial products. The aim of the framework is to promote confidence and participation in financial markets by investors and institutions, and a sound and efficient financial sector. The review was initiated by the government in recognition that some elements of financial sector regulation have not been reviewed for many years and that some aspects are out of step with international standards and codes, and with accepted best practice. The report:

outlines a framework for the review;
assesses the current regulatory regime for the non-bank financial sector against the framework for the review, including identifying any issues; and
provides the preliminary views of officials on the general directions for reform of the non-bank financial sector. These preliminary views will be used to inform the later stages of the review and the work being led by Treasury on reviewing the domestic institutional arrangements for financial sector regulation that is due to report back to Ministers in October 2005 with preliminary conclusions.

You can access an explanation of the first stage of the review at:
http://www.med.govt.nz/templates/ContentTopicSummary____22152.aspx

You can access the report directly at:
http://www.med.govt.nz/templates/MultipageDocumentTOC____14105.aspx

Institutional Arrangements for Regulation of the Financial Sector

21 December 2005

The Review of Financial Products and Providers being undertaken by the Ministry of Economic Development has signalled, in principle, greater prudential regulation of non-bank deposit taking institutions, of some insurers and of some superannuation schemes. The prospect of greater prudential regulation of these financial providers means that it is timely to consider the institutional arrangements for regulation of the financial sector.

In December 2005, Cabinet agreed to prudential supervision of the financial sector being consolidated into a single regulator and has agreed, in principle, that this regulator should be the Reserve Bank. The in principle decision that the single prudential regulator should be the Reserve Bank is subject to further reporting to Cabinet, by end November 2006, on the details of the institutional arrangements for the prudential regulator, and on the Review of Financial Products and Providers.

The Reserve Bank is comfortable with this decision.

You can view the Cabinet paper and the Cabinet minute on the Treasury's website.