Academic journal article The Reserve Bank of New Zealand Bulletin

Regulation of NZ Insurance Sector Well Underway

Academic journal article The Reserve Bank of New Zealand Bulletin

Regulation of NZ Insurance Sector Well Underway

Article excerpt

19 March 2013

Implementation of the Reserve Bank's regulatory regime for insurers is well underway, with the aim of promoting a sound and efficient insurance sector, the Reserve Bank's Head of Prudential Supervision Toby Fiennes said today.

In a speech to the Australasian General Insurance Exchange Conference in Sydney, Mr Fiennes said that the new licensing regime is already resulting in a sounder insurance sector.

"The requirement to obtain a licence means that insurers must all meet certain minimum standards and this serves to reduce areas of high risk within the sector," he said.

The Reserve Bank's regulatory regime is intended to reduce the risk of an insurer failing, by promoting a sound and efficient insurance sector. Its regulatory approach is based on principles of self, market and regulatory discipline.

The regime includes requiring insurers to meet solvency standards, which incorporate a catastrophe risk capital charge aimed at ensuring insurers can adequately respond to a 1 in 500 year event. Insurers are also required to be licensed, with the industry working towards a full licensing deadline of 7 September this year. …

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