The Reserve Bank is reminding licensed insurers of their reporting obligations under applicable solvency standards or as conditions of exemptions from solvency standards. It does this after sending a warning to Pacific International Insurance Pty Limited (Pacific International) for failing to include its solvency ratio in its New Zealand branch financial statements for three consecutive years.
The insurance industry needs to be aware of the importance of complying with disclosure requirements. A June 2017 report on insurers’ obligations to disclose financial strength ratings and solvency information found compliance was well short of minimum requirements. Subsequently compliance across the review participants improved as a result of the Reserve Bank’s post-review engagement although there have been ongoing issues with Pacific International.
Pacific International acknowledged its mistakes in its financial reporting and is taking remedial measures to prevent similar issues in future. The Reserve Bank has warned Pacific International that future non-compliance with financial reporting rules is likely to result in formal enforcement action being taken.