Supervision of insurers
The Insurance Oversight team within the Prudential Supervision Department at the Reserve Bank is responsible for implementing the Reserve Bank's oversight and supervision of insurers. The new prudential supervision framework recognises that the Bank has an important role to play in ensuring a well functioning insurance sector in New Zealand.
Supervising insurance firms will be underpinned by a supervision regime that:
- is consistent in its approach and philosophy to the Reserve Bank's other prudential supervision activities;
- is outcomes focused;
- avoids imposing unnecessary compliance costs on insurers; and
- is risk based.
Insurers must be familiar with, and comply with, all their obligations under IPSA. These are monitored by the Reserve Bank, and situations of non-compliance will be investigated and enforced as appropriate.
Guidelines for insurers
Please refer to Licensing for insurers for the list of guidelines produced by the Reserve Bank to assist licensed insurers in understanding the supervision requirements of the Act.
NZ Insurer Data Collections
The NZ Insurer Data Collections webpage sets out the regular data returns insurers are required to provide.
Catastrophe risk survey 2016
The Reserve Bank has decided to conduct a brief survey of licensed insurers on their processes and governance of assessing their catastrophe exposures. Insurers that are issued with a section 121 notice for the survey are required to complete the Form below.
Catastrophe claims return
The experience of the Canterbury earthquakes has highlighted the importance of regularly monitoring claims and reinsurance positions for significant catastrophe events as part of prudential supervision.
The Reserve Bank has modified existing reporting for the Canterbury earthquakes to add the Kaikoura earthquake to its monitoring of relevant insurers. Property insurers will be issued with a section 121 notice for the updated reporting requirements for this return.
The frequency of reporting is tailored based on the stability of claims estimates and the actual or potential significance of each event. For example initial reporting of Kaikoura earthquake will generally be monthly and revert to quarterly as claims estimates become more reliable. There is provision for resubmission if a valuation results in a material movement in estimates after the original submission. We think this provides a balance between compliance costs and our prudential monitoring needs.
If there are further significant catastrophe events in future, the reporting requirements will be updated. This includes updates to which insurers are required to report based on the relevancy of each event.