The Reserve Bank says strong boards and governance are critical to the success of the insurance industry.
"Responsibility and accountability for prudently running an insurance business rests primarily with the insurer's board and senior management," Peter Brady, Manager Insurance Oversight Policy, said in a speech to insurance company directors in Auckland this afternoon.
"The aim of our work regulating and supervising insurance firms is to deliver a soundly functioning insurance sector. We take a similar philosophical approach to regulating insurers that we've adopted for regulating banks, but modified to fit the insurance sector," Mr Brady said.
He said directors could expect the Reserve Bank to focus more on insurers that have the most impact on the economy, and on the risks that pose the greatest threat to the soundness and efficiency of the insurance sector.
"Insurers, and particularly directors and senior management, can expect that the Reserve Bank will hold them accountable for full compliance with the requirements of our regulations and the Insurance Prudential Supervision Act," Mr Brady said.
The text of the speech is available online: Supervising insurers
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