The Reserve Bank of New Zealand – Te Pūtea Matua – is seeking feedback on the penalties and enforcement tools available when supervising insurers and on its powers to manage distressed insurers.

This consultation is the third of five that we are conducting as part of our review of the Insurance (Prudential Supervision) Act (IPSA) 2010.

IPSA currently includes a range of criminal penalties for non-compliance with regulation. In this consultation, we discuss introducing other types of sanctions and penalties to allow a more proportional and graduated response to compliance issues.

“A well-designed enforcement framework should provide a range of credible responses to compliance problems so we can respond in a way that is proportional to the issue we’re addressing,” Deputy Governor and General Manager for Financial Stability Christian Hawkesby says.

This consultation reviews our powers to obtain information from insurers to inform our supervision. It also discusses introducing a compulsory on-site inspection power and a breach-reporting system, where insurers are required to monitor their own regulatory compliance and communicate breaches to the Reserve Bank.

Finally the consultation reviews our role in dealing with distressed insurers, including insolvency provisions and resolution powers. In particular, it explores updating the resolution framework by asking some insurers to undertake resolution planning and by revisiting how statutory management should operate for insurers.

For further information, please read the accompanying non-technical summary and full consultation paper. We are welcoming submissions on the policy questions set out in this Enforcement and Distress Management consultation until 20 May 2022.

We have provided a long consultation period as we are mindful of the range of industry consultations currently underway. We encourage stakeholders to contact us if they would like to provide feedback other than by written submission. We will be hosting a webinar for interested parties on 22 March. To register your interest and provide submissions, please email ipsareview@rbnz.govt.nz .

More information

• Review of the Insurance (Prudential Supervision) Act 2010
• Reserve Bank relaunches Insurance Act review – October 2020

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