Wrinkles identified by the Reserve Bank in the transitional phases of the Insurance (Prudential Supervision) Act (IPSA) are to be ironed out in an amendment Bill, introduced to the House on 6 November.
We briefly outline the main changes.
Changes to reporting requirements
Currently interim audited individual and group financial statements must be provided to the Reserve Bank within five months of the end of the first half of an insurer’s accounting period.
The Bill reduces this timeframe to three months – aligning it with the proposed time limits for year-end reporting in the Financial Reporting Bill, and removes the requirement to prepare interim financial statements for both a group and a parent (instead only group interims are required).
The time limit for year-end financial statements will remain at five months until the Financial Reporting Bill comes into force – which, for insurers, we expect to be in early 2014, at the same time as the Financial Markets Conduct Bill.
The Bill also empowers the Reserve Bank, by notice to an insurer, to allow that insurer’s interim financial statements to be prepared in accordance with (for example) its home requirements, rather than NZ GAAP.
In addition, the Bill:
tweaks financial strength rating rules so that insurers winding down don’t need one and an insurer (generally) won’t need to provide its rating to a customer more than yearly
expands the situations in which material may be incorporated by reference beyond solvency standards to include regulations and other instruments made by RBNZ under IPSA
extends the provisional licensing regime for insurers that are subject to an insolvency proceeding, and
extends the limitation period in respect of an offence under the Act so that it ends five years after the date the offence was committed.
If you have any questions about the amendments contained in this Bill, or would like any assistance in relation to an insurance supervision issue, please contact one of the lawyers featured.
Our thanks to Jordon Boyd for writing this Brief Counsel.