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.