Regulation and supervision

The Reserve Bank regulates banks, insurers and non-bank deposit takers (including finance companies that take deposits from the public, building societies and credit unions), for the purpose of promoting the maintenance of a sound and efficient financial system.

The Bank’s approach to prudential supervision and regulatory policy-making are described in our Statements of approaches.

The Bank is also one of three supervisors tasked with ensuring firms meet obligations designed to help deter and detect money laundering and terrorist financing (known as anti-money laundering or AML).

Banks

The Reserve Bank registers and supervises banks. This section provides information on the prudential oversight of registered banks in New Zealand.

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Go to the Bank Financial Strength Dashboard website

The Bank Financial Strength Dashboard measures the financial condition or strength of locally incorporated banks in New Zealand.

Insurers

The Reserve Bank of New Zealand is the prudential regulator and supervisor of all insurers carrying on insurance business in New Zealand, and is responsible for administering the Insurance (Prudential Supervision) Act 2010.

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Thematic Reviews

The Bank conducts thematic reviews in the areas of Insurance and Banks.

Current thematic reviews

Non-bank deposit takers

This section provides information on the prudential regulation of non-bank deposit takers (NBDTs) as carried out by the Reserve Bank under the Non-bank Deposit Takers Act 2013.

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Anti-money laundering

The Reserve Bank supervises banks, non-bank deposit takers and life insurers to ensure they meet obligations designed to help deter and detect money laundering and terrorist financing. Money laundering is the way criminals disguise the illegal origins of their money. Financers of terrorism use similar techniques to try and avoid detection by authorities, and to protect the identity of those providing and receiving money for funding acts of terrorism.

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Financial market infrastructure oversight

The Reserve Bank oversees New Zealand financial market infrastructures (FMIs), such as payment and settlement systems, for the purpose of promoting the maintenance of a sound and efficient financial system. FMIs are a critical element of the financial system and are highly relevant for the Reserve Bank’s core responsibilities that stem from its financial stability objective.

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Financial Sector Assessment Programme

The International Monetary Fund (IMF) undertook a Financial Sector Assessment Programme (FSAP) for New Zealand in 2016, with the findings and recommendations released in May 2017. An FSAP is a comprehensive review of a country’s financial system, with a particular focus on the quality of financial sector regulation. The previous New Zealand FSAP was conducted over 2003-04.

Cautions and notices

The Reserve Bank of New Zealand has issued current and expired notices.

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Industry notices

Statements of approaches

The Bank’s approach to prudential supervision and regulatory policy-making are described in the Statements of policy-making, supervisory and enforcement approaches.

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Crisis management

There are many potential incidents that could directly or indirectly impact the financial system in a way that could significantly damage or impede the soundness or efficiency of the financial system.

Whistleblowing

There may be instances where individuals employed by a regulated entity may seek to contact the Reserve Bank to report misconduct by the regulated entity. This section sets out how they should contact the Bank and what they can expect if they do so.

Regulatory news & updates

Oct 2020 Insurance

The Reserve Bank is relaunching its Review of the Insurance (Prudential Supervision) Act 2010 following deferrals due to work on the RBNZ Act and due to COVID-19. An initial paper has been released setting out the anticipated timeline for the project.

The Reserve Bank is also launching a review of the Insurer Solvency Standards. These documents govern the minimum capital that insurers are required to hold, and need to be reviewed in light of the findings of a number of recent reviews, as well as the impending introduction of IFRS 17 – Insurance Contracts. A paper has been released setting out the timeline for the project as well as the principles intended to guide the review. Feedback is invited.

Sep 2020 AML-CFT

AML/CFT Supervisors have updated the Enhanced Customer Due Diligence guideline

Read the Updated Enhanced CDD guideline (PDF 862KB)

Aug 2020 Insurance

The Reserve Bank is publishing an amended Insurer Solvency Return and Guidance Note (v5.3) to improve the information provided through projections of solvency. These documents will be in-force from 1 September 2020.

Table 1.6 of the Insurer Solvency Return now requires non-exempt insurers to provide projections on two bases – with and without capital movements (such as dividends and capital injections). Paragraph 55 of the Guide describes how this table should be completed.

Paragraph 57 of the Guide now advises on which accounting standards, bases & methodologies should be employed. Please note that at this time the impact of IFRS17 (“Insurance Contracts”) on solvency calculations is not known with a high degree of certainty, and that the Reserve Bank will issue a further communication when this view changes.

The Reserve Bank anticipates that the next set of substantive changes to the Insurer Solvency Return and Guide will be released in early 2022, in conjunction with expected updates of solvency standards.

Jul 2020 Insurance

The Reserve Bank of New Zealand issued a licence under section 19 of the Insurance (Prudential Supervision) Act 2010 (the Act) to Resolution Life New Zealand Limited on 22 June 2020.

The Reserve Bank of New Zealand has given notice pursuant to section 28(2) of the Act that it remains satisfied of the matters in section 19(1)(a) to (m) of the Act in respect of the acquisition of AMP Life Limited by Resolution Life Australia Pty Ltd.