Review of the Insurance Solvency Standards
Status: A feedback statement has been released in respect of the consultation on the Draft Interim Solvency Standard and its quantitative impact. Revisions to some aspects of the standard are in preparation.
1 March 2022
A feedback statement has been released in respect of the consultation on a Draft Interim Solvency Standard that was initiated on 22 July 2021. This statement contains a summary of the feedback received, indicative Reserve Bank responses and an overview of impacts on capital measures. A file containing the full the full text of all non-confidential submissions has also been provided.
If you have any questions on the feedback statement, please write to [email protected]. A webinar to discuss the standard will be held at on 22 May 2022. Please subscribe to the ‘Insurers’ updates on our mailing list if you would like to attend.
5 October 2021
A draft Interim Solvency Standard was exposed for consultation on 22 July 2021, with the intention of coming into force on 1 January 2022. This date was chosen to permit use by early adopters of IFRS 17, the new accounting standard for insurance contracts.
During the consultation period, however, we have become aware that
- there do not seem to be any insurers planning to early-adopt IFRS 17;
- many insurers might find it difficult to be ready by this date; and
- consultation feedback is likely to require some changes to the standard as drafted.
For these reasons, we have decided to change the date of implementation of the Interim Solvency Standard to 1 January 2023. This date aligns with the date on which insurers must adopt IFRS 17. The Reserve Bank will have time to address some of the more significant points raised in the consultation and insurers will have sufficient time to prepare their systems and processes.
We are currently in the process of analysing remaining feedback from the consultation and will be publishing a summary of this material in due course. The Reserve Bank intends to make use of the additional time and engage with industry and stakeholders further over the coming weeks and months. We will aim for the final interim standard to be published by 01 October 2022.
If you have any questions on the change of implementation date, please write to [email protected]
13 September 2021
Over September we will be conducting a quantitative impact assessment exercise with selected insurers, to help us understand the capital impacts of the draft interim solvency standard. In order to assist other insurers and their advisers with their analyses, we are publishing the template that will be used for this exercise. It is likely that this template will form the basis for the Insurer Solvency Return once the standard is implemented.
Readers of the instructions document should note the following:
- These instructions were designed for use in the quantitative impact assessment and were not intended for other uses. We are releasing them to maximise transparency around the process.
- The instructions include certain treatments which may or may not become part of the enforced standard and the RBNZ has no obligation to adhere to these treatments in later versions of the standard.
- Submissions on the draft interim solvency standard should make reference to the document as published on July 22, not to these instructions.
22 July 2021
We are publishing three documents relating to the Review of the Insurance Solvency Standards:
- A feedback statement from the earlier consultation on IFRS 17 and the structure of the solvency standards (PDF 860KB)
- A draft of an Interim Solvency Standard intended to apply to almost all insurers from early 2022, for a period of approximately three years (PDF 1.9MB)
- An explanatory note to document the thinking behind the Standard and provide clarification to readers (PDF 1MB)
Feedback is invited on the standard and can be provided:
- Online, at a webinar to be held at 10am on Thursday 5 August. To express your interest in attending the webinar, please subscribe to our mailing list. An invite will be sent to our Insurance mailing list closer to the date.
- In writing, to [email protected] (early submissions relating to substantive issues are particularly welcome and will not preclude a more comprehensive later submission)
The consultation will run until 5pm on October 1 2021.
4 March 2021
We have today released a feedback statement relating to the consultation undertaken in the last quarter of 2020 on the principles guiding the Review. The statement describes several modifications to the principles that are being made in response to the submissions received.
The consultation on the structure of the solvency standards and our approach to IFRS 17 closed on 18 February 2021. We are considering submissions received and developing a feedback statement. This work will inform the development of draft interim standards, due for exposure during the third quarter of 2021.
- Review of Insurance Solvency Standards: Principles and Timeline Consultation feedback statement (PDF 700KB)
- Review of Insurance Solvency Standards: Principles and Timeline Consultation Summary of Submissions (PDF 4.5MB)
30 November 2020
The Reserve Bank has released a consultation paper about the structure of our solvency standards and our approach to IFRS 17. This paper is a precursor to the interim standard(s) that will be exposed later in 2021. It raises a number of issues relating to how solvency standards are applied and proposes certain options for their resolution.
- Consultation paper on structure of solvency standards (PDF 2MB)
- Non-technical summary on structure of solvency standards (PDF 302KB)
1 October 2020
The Reserve Bank has commenced a review of the Insurance Solvency Standards. An initial paper sets out the anticipated timeline for the review and exposes for consultation several principles intended to guide the review. A substantive consultation paper – responding to IFRS 17 and dealing with the structure of solvency standards - is expected to be issued in November 2020.