The Reserve Bank is looking for feedback on its insurance policyholder security consultation, which explores whether current legislation gives policyholders the protection they need.
The Bank says an important purpose of insurance legislation is to promote a financially sound insurance sector, Deputy Governor and General Manager of Financial Stability Geoff Bascand says.
The consultation is part of the Bank’s wider review of the Insurance (Prudential Supervision) Act (IPSA) 2010 and looks at the breadth of information insurers publish – so customers can assess the stability of insurers before buying a policy.
The review looks at special arrangements protecting life insurance assets (known as statutory funds) and explores whether aspects of these protections could be extended to other types of insurance.
Bascand says: “The consultation also reviews the legislation governing the amount of capital insurers maintain as a buffer in case of adverse events – otherwise known as their ‘solvency capital’ – and asks whether there should be greater clarity about policyholders’ rights when some policies are terminated early.
“We also ask whether New Zealand should consider establishing a guarantee fund for some policyholders’ claims if an insurer fails.”
Consultation closes on 15 November 2021. Full details here.