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Insurance solvency standards and NZ IFRS 16 leases

In 2018, we consulted on changes to the solvency standards for insurers to cater for the new assets and liabilities introduced by NZ IFRS 16 leases.

Consultation opened:
Consultation closed:
Published date:
Status:
Closed

Our response to submissions

In November 2018, we completed our consideration of the submissions we received on the proposed changes to the Insurance Solvency Standards for NZ IFRS 16 Leases.

The final changes were as originally consulted upon except for a change to the treatment of leases of intangible assets. The amended solvency standards also:

  • consolidate the non-life catastrophe risk charge loss return period within the Solvency Standard for Non-life Business 2014 previously set out in a separate Policy Position Paper
  • set out that the annual insurer solvency return is subject to a reasonable assurance level of audit. See the consultation for audit requirements for insurer data returns for more information.

Read the audit requirements for insurer data returns consultation

Our final proposals and comments on the submissions received were set out in our response to submissions:

Read the response to submissions: Solvency Standards and NZ IFRS 16 Leases (PDF 728 KB)

Submissions received

We received submissions from the following entities. Trading or brand names may be used in place of legal entity names in some cases.

Note: we have redacted responses to the informal survey included in the consultation. Where an entity provided only survey responses, no link has been provided.

AA Insurance

AIA & Sovereign

Atradius (confidential)

BNZ Life

Cigna

Fidelity Life

Foundation Life

Financial Services Council of New Zealand

IAG

Insurance Council of New Zealand

Medical Insurance Society Limited & Medical Life Assurance Society

nib

OnePath Life

Partner's Life

Southern Cross

Consultation paper

We released the consultation paper on 27 June 2018 on insurance solvency standards and NZ IFRS 16 leases. The paper:

  • set out some proposed changes to the insurance solvency standards to cater for the new assets and liabilities introduced by NZ IFRS 16
  • discussed the requirements of NZ IFRS 16, the reasons for the proposed changes and alternatives considered
  • sought additional information from licensed insurers on the current and proposed accounting treatment of lease contracts through a survey.

Consultation paper: Solvency Standards and NZ IFRS 16 Leases (PDF 1.1 MB)