Reserve Bank issues Insurance Consultation Paper
The Reserve Bank today released a Consultation Paper (PDF) seeking input on certain issues regarding the Bank's proposed new responsibilities for the prudential regulation of the insurance sector.
In November 2007 Cabinet confirmed the Bank would be the prudential regulator of the insurance sector. Legislation is being developed to give effect to this and to create the new framework for the sector.
Deputy Governor and Head of Financial Stability, Grant Spencer, said that the Consultation Paper sets out alternatives, and in some cases preferred alternatives, for the prudential regulatory approach to the following issues:
the separation of insurance business lines within insurers;
the treatment of foreign-owned insurers;
effective regulatory involvement in the management of a distressed insurer;
connected party exposures and non-insurance activities of licensed insurers;
amalgamations, transfers and other significant corporate transactions in the insurance sector; and
ensuring the confidentiality of prudential information supplied to the Reserve Bank by insurers.
Further details are set out in the Consultation Paper found on the Reserve Bank's website .
The Reserve Bank invites responses to the questions raised in the Consultation Paper by 20 June 2008.
Following consultation, the Reserve Bank will in July seek agreement from Cabinet to proposals in the above areas. The legislation will be developed over the remainder of 2008.
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