23 November 2018
The Reserve Bank has completed its consideration of the submissions received on the proposed changes to the Insurance Solvency Standards for NZ IFRS 16 Leases.
The final changes are as originally consulted upon except 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; and
- set out that the annual insurer solvency return is subject to a reasonable assurance level of audit. This consultation on this requirement may be found here.
The final proposals and comments on the submissions received are set out in the feedback statement:
Response to Submissions:
Insurance Solvency Standards and NZ IFRS 16 Leases (PDF 728KB)
Submissions were received from the following entities. Trading or brand names may be used in place of legal entity names in some cases. Note that responses to the informal survey included in the consultation have been redacted. Where an entity provides only survey responses no link is provided.
AIA & Sovereign
Financial Services Council of New Zealand
Insurance Council of New Zealand
Medical Insurance Society Limited & Medical Life Assurance Society
Consultation period: 27/6/2018 to 22/8/2018
27 June 2018
The Reserve Bank has released a Consultation Paper: Insurance Solvency Standards and NZ IFRS 16 Leases. The paper:
- Sets out some proposed changes to the insurance solvency standards to cater for the new assets and liabilities introduced by NZ IFRS 16;
- Discusses the requirements of NZ IFRS 16, the reasons for the proposed changes and alternatives considered; and
- Seeks additional information from licensed insurers on the current and proposed accounting treatment of lease contracts through a survey. The survey may be completed on a best endeavours basis.
Interested parties are invited to provide comments on the proposed changes, the questions set out in the Consultation paper and on any other issues they consider should be taken into account, by 5pm, Wednesday 22 August 2018.
Insurance Solvency Standards and NZ IFRS 16 Leases (PDF 1.1MB)
Submissions should be addressed to:
Richard Johnson, Senior Adviser
Prudential Supervision Department
Reserve Bank of New Zealand
and submitted to the following e-mail address: [email protected]
Microsoft Word format (.doc or .docx) is preferred as that assists the efficient collation and analysis of comments.