Latest Captive Insurance News

Insurance (Prudential Supervision) Act 2010: Solvency Standard for Captive Insurers Transacting Non-Life insurance Business
This note is to advise a further short delay in the release of this Solvency Standard, which is now targeted for Friday October 19 2011.
Please accept the apologies of the Reserve Bank of New Zealand for any inconvenience this may cause.

Reserve Bank website update - Transfers and Amalgamations Guideline and Exemptions for Small Insurers Guideline
The Reserve Bank has released two guidelines. The first is the Transfers and Amalgamations guideline that provides guidance for insurers who wish to undertake transfers and amalgamations of their insurance business. The second is the Exemptions for Small Insurers guideline that provides guidance for the exemptions available to insurers whose annual gross written premium is below the threshold amount.
Please refer to the Reserve Bank website for more information.

Reserve Bank website update - Consumer Credit Insurance Regulation and new guidelines
The Insurance (Prudential Supervision) Amendment Regulations 2011 has been issued by Order in Council. This regulation deems certain consumer credit insurance contracts, where issued by a non-life insurer, not to be life policies.

The New Zealand Institute of Chartered Accountants has been liaising with the Bank about the audit statement exemption from financial strength rating requirements relating to:

• captive insurers; and
• insurers that only have reinsurance business in New Zealand. 

The Bank has adjusted its licensing requirements to allow the audit work behind the statement to be undertaken at the same time as the annual financial statements audit.

Captive Insurers

The Provisional Licence Application Form read:
Applicants that want to make use of this exemption should supply a statement from their auditor that:
[Name of applicant]:

• is a subsidiary of [name of entity] that is not an insurer (the parent); and
• only insures risks of the parent [and/or] of other subsidiaries of the parent.

The Bank will apply the following condition on the licence of captive insurer:
“[name of insurer] must notify the Bank if it ceases to meet the definition, in the Insurance (Prudential Supervision) Act 2010, of captive insurer.”

We have amended it to:
When insurers seeking an exemption make their provisional application the CEO/NZ CEO of the insurer should attest that “[name of applicant] is a subsidiary of [name of entity] that is not an insurer (the parent) and only insures risks of the parent [and/or] of other subsidiaries of the parent.”

This should be followed by a separate negative assurance statement from auditor to the insurer, to the effect that nothing has come to the auditor’s attention to suggest the applicant does not meet the exemption provisions.  This auditor’s statement needs to be provided to the Bank before 30 September 2012.

The Bank will apply the following condition on the provisional licence of the reinsurer:
“[name of insurer] must notify the Bank if it ceases to meet the definition, in the Insurance (Prudential Supervision) Act 2010, of captive insurer. It must also provide the Bank by 30 September 2012 with an auditor’s negative assurance statement that nothing has come to the auditor’s attention to suggest the applicant does not meet the exemption provisions.”

Insurers that only have reinsurance business in New Zealand

The Provisional Licence Application Form read:
Applicants that want to make use of this exemption should supply a statement from their auditor that:
“The only insurance business in New Zealand carried on by [name of applicant] is insurance under which [name of applicant] indemnifies another insurer (the cedent) against losses on 1 or more contracts of insurance entered into by the cedent.”

The Bank will apply the following condition on the licence of the reinsurer:
“[name of insurer] must notify the Bank if it carries on insurance business in New Zealand that is not reinsurance.”

We have amended it to:
When insurers seeking an exemption make their provisional application the CEO/NZ CEO of the insurer should attest that “The only insurance business in New Zealand carried on by [name of applicant] is insurance under which [name of applicant] indemnifies another insurer (the cedent) against losses on 1 or more contracts of insurance entered into by the cedent.”

This should be followed by a separate negative assurance statement from auditor to the insurer, to the effect that nothing has come to the auditor’s attention to suggest the applicant does not meet the exemption provisions.  This auditor’s statement needs to be provided to the Bank before 30 September 2012.

The Bank will apply the following condition on the provisional licence of the reinsurer:
“[name of insurer] must notify the Bank if it carries on insurance business in New Zealand that is not reinsurance. It must also provide the Bank by 30 September 2012 with an auditor’s negative assurance statement that nothing has come to the auditor’s attention to suggest the applicant does not meet the exemption provisions.”

If you have any questions, please call Andrew Lumsden on 04 471 3720.

Reminder to insurers of the current deadlines set by the Insurance (Prudential Supervision) Act 2010 and the Reserve Bank as well as to obtain feedback from insurers as to how they are progressing with licensing.

More information can be found on the Bank’s website. A number of guidelines exist to assist insurers – a good first step is the Application for a licence guideline. Further guidelines are still to follow, including a Small insurers exemption guideline which would provide additional information on the exemptions available to small insurers, which will refer to the regulations allowing exemptions for small insurers.

Important timelines under the Insurance (Prudential Supervision) Act 2010 (IPSA) are:

7 March 2012

• All insurers must be licensed by this date in order to carry on insurance business in New Zealand.
• For some insurers this may be an application for a provisional licence; for others this may be an application for a full licence.
• For some insurers this may be a run-off provisional licence under section 245 of IPSA; this is available to insurers that will cease carrying on insurance business in New Zealand by 7 September 2013.  
• It is an offence under IPSA for an unlicensed insurer to be “carrying on insurance business in New Zealand” (as defined by IPSA).

30 June 2011

• The Reserve Bank is requiring insurers to apply for a licence by 30 June 2011.
• An insurer is not automatically refused a licence if they do not apply for a licence by 30 June 2011 – this date is an operational date to allow the Bank time to license insurers by 7 March 2012.
• It is expected that will be some information that insurers are not able to provide to the Bank by 30 June 2011, e.g. solvency calculations;  an insurer should still apply for a licence by 30 June 2011 but can provide further (or different) information to the Bank after this date.

Licence application forms

• Provisional and full licence application forms can be found on the Licensing page of the Reserve Bank website.  
• The provisional licence application form assists in explaining what the Bank requires under a provisional licence application form.
• Insurers applying for a full licence, including those unable to access the provisional licence route, should complete the provisional licence application form in addition to the full licence application form.

Please contact me if I can be of assistance in respect of New Zealand Medical Professionals, Unions Insurance, Tatua Insurance and Selacs Insurance. James Painter is the supervisor for Teal Insurance, Ceres Risk & Insurance Solutions and Quest Insurance – please contact James (04 471 3838) if he can be of assistance in respect of these insurers.

Please also contact James or I if you do not expect to be able to meet the Bank’s licence application deadline of 30 June 2011 in respect of any of the above seven insurers.

Duncan Heath
Advisor, Insurance Oversight
Prudential Supervision Department | Reserve Bank of New Zealand
PO Box 2498 | 2 The Terrace | Wellington, New Zealand
Telephone +64 4 471 3876 |  Fax +64 4 471 3995   

Letter from Minister of Trade Hon. Tim Groser re Insurance Act 2010

After such a long wait, the report on the PM’s financial services hub has finally been released (you can see the PDF at here).  AND we get a mention on page 48. 

The important section is pasted below.

 The Reserve Bank, New Zealand’s insurance regulator, notes that the Insurance (Prudential Supervision) Bill 2009 focuses on the carrying out of business in New Zealand and requires a specified amount or proportion of the licensed insurers’ business to relate to New Zealand policy-holders. New Zealand captives will do their usual business, but insurers with no business connection with New Zealand will not be licensed. This is designed to reflect an active decision not to establish New Zealand as a “flag of convenience” insurance jurisdiction, to prevent captive insurers with offshore parents from seeking out New Zealand as a perceived “soft touch” regulatory jurisdiction to offer insurance to non-New Zealand based policy-holders.

Notwithstanding the Reserve Bank’s position, the IFSDG considers that this is a missed opportunity for the Government to consider introducing an international regulatory framework for captive insurance that is superior to the flag of convenience jurisdictions.. This would require the insurance regulator to have an outward-looking international division. It is the IFSDG’s expectation that the captive insurance industry would partially support the cost of this regulation.

The IFSDG supports the New Zealand Captive Insurance Association’s view that the Government should reconsider its recent position on  captives and, instead, seek to grow the industry.

Policy Position Paper version of the solvency standard for captive insurers. Changes from the version sent for consultation on 21 October 2010 include the following:

1. Clarification regarding non-aggregation of minimum capital requirements if an insurer is subject to more than one solvency standard.
2. Re-ordering of definitions section.
3. Deletion of the requirement to receive prior Bank approval for payments of dividends or capital reductions (old paragraphs 37 and 38).
4. Clarification regarding the interest rate risk capital charge.
5. Minor tidying-up in paragraphs 4.1 – 4.3 (obligations of a licensed insurer).
6. Removal of the requirement for the appointed actuary to review the catastrophe risk capital charge (not applicable to captive insurers).

If you wish to make further representations on matters not already canvassed in respect of this standard please ensure they are made via response to this EMail, and are received no later than 27 May 2011.

This standard will be formalized at or around 30 June 2011. (See attached file: Draft Captives Solvency Standard Policy Position Paper 18042011.pdf)

In recognition of this more urgent requirement on everyone’s time the Reserve Bank has extended the timeframe toward delivery of finalised solvency standards.

The following is the revised timetable toward the release of finalised solvency standards:

Life Standard:
early April:          Second consultation version to be released to stakeholders
late May:             Consultation closes
end June:            Finalised  version of life solvency standard released

Non-Life Standard:
early April:          Further consultation version to be released to stakeholders
late May:             Consultation closes
end June:            Finalised version of non-life solvency standard released

Captives Standard:
early April:          Policy position paper released
end June:            Finalised version of captive standard released

We trust that the extended timetable will afford insurers more opportunity to focus on matters of greater current importance.

The Reserve Bank Insurance Sector website has been updated, including links to the following documents:

· Fit and proper standard (draft for stakeholder consultation)
· Fit and proper policy guidelines
· Governance guidelines.

The Reserve Bank Insurance Sector website can be found at: www.rbnz.govt.nz.

Ernst & Young
Example presentation of the Statement of Comprehensive Income in compliance with the Exposure Draft on Insurance Contracts issued in July 2010
E&Y's newest IFRS publication provides an overview of the presentation model and specific disclosures required by the ED. It highlights the main differences with the previous presentation requirements under IFRS 4, and considers some possible implementation issues. The analysis is based on a fictitious composite insurer (Insurance Group Ltd.) and seeks to illustrate how the current presentation of the Statement of Comprehensive Income under IFRS can be transformed into the presentation model that the ED proposes. The analysis also seeks to show how the presentation within the Statement of Comprehensive Income interacts with the reconciliation of insurance contract balances - a new disclosure requirement proposed in the ED.
The Association would like to thank Brent Penrose and Ernst & Young for this publication. (See attached file: EY Exposure draft ED4.pdf)

The Reserve Bank Insurance Sector website has been updated, including links to the following guidelines:

· Application for a licence
· Risk management programme requirements
· Rating agency approval.

Insurance (Prudential Supervision) Act 2010: Release of Solvency Standards
You will recall that the Reserve Bank has recently gone out to stakeholder consultation on various solvency standards (life insurance, non-life insurance and captive insurance) to be issued in accordance with Section 55 of the Act. Response to these consultations has been wide-ranging, and a number of issues have been raised for our further review. In some cases we will be seeking further information from stakeholders prior to finalizing our position.

Although it had originally been our target to release all solvency standards by the end of December 2010, the amount of additional policy consideration generated by the consultation responses means that solvency standards will not now be finalized for release before February 2011. Whilst this delay is regretted, the extended policy review will lead to more robust regulatory outcomes.

This deferred release should not necessarily delay your preparatory work towards the licensing process now underway. Consultation release of the solvency standards means that all stakeholders have had the opportunity to be aware of the majority of their content. In addition, licensing is not a legislative requirement before 7 March 2012 so there is still ample time for insurers to plan their way forward into the new environment.

Reserve Bank Solvency Standard Worksheet (See attached file: Captive insurance solvency calculation template QIS consultation version - October 28 2010.xls )

The NZCIA review of the Draft Solvency Standard issued by the Reserve Bank by Peter Lowe President (See attached file: Reserve Bank Solvency Standard 2nd Update Oct 2010.pdf )

Reserve Bank calls for All New Zealand Insurers to complete an "Insurer Notice of Intention to Carry On Business of Insurance in New Zealand" (See attached file: InsurerNoticeofIntention.pdf)

The NZCIA submission to the Reserve Bank of New Zealand on the "Draft Solvency Standard for Captive Insurers transacting non life insurance business" has been submitted.
(See attached file: Letter to Mr Dean Reserve Bank Aug 2010.pdf)(See attached file: Final NZCIA Submission on Solvency Standard 17 Aug 2010.pdf)

Insurance (Prudential Supervision) Bill: Draft Solvency Standard For Captive Insurers: Consultation Document
Further to Email dated 29 July which released for consultation a draft “Solvency Standard for Captive Insurers Transacting Non-Life Insurance Business”, now attach a spreadsheet that will enable captive insurers to calculate their solvency position in the context of the draft standard.

I would ask that as many captive insurers as possible complete the spreadsheet - using data from most recently reported annual accounts - and send a copy to the Reserve Bank to enable our continued assessment of the draft solvency standard at an individual insurer level. All information received will be treated as strictly confidential and will not be available for public release.

Please be reminded that the closing date for submission in the consultation on the draft standard is 3 September 2010.
For further information regarding this spreadsheet please contact
David Williams, phone 04 4713748 or Email david.williams@rbnz.govt.nz

The NZCIA reviews the Select Committee report on the Insurance (Prudential Supervision) Bill (See attached file: Ins Prud Bill Update _June 2010_.pdf)

Minter Ellison Rudd Watts Lawyers, a Founding Member of the Association, is pleased to provide the Association with it's June Tax Update. (See attached file: TaxUpdateJune2010.pdf)

Select committee release report on Insurance (Prudential Supervision) Bill
(See attached file: DBSCH_SCR_4758_InsurancePrudentialSupervisionBill9.pdf)

NZCIA Member Minter Ellison has published a tax update
(See attached file: TaxUpdate5May2010.pdf)

Peter Lowe was asked to present a overview of the New Zealand Captive Insurance Industry to the IFSD Committee. The IFSD Committee is the Prime Minister of New Zealand's Task Force to review the opportunities for New Zealand with the creation of a Financial Service Hub. (See attached file: Microsoft PowerPoint - Captive benefits - IFSD Group May 2010.pdf)

Captive Review Article - Domicile Update
This article has been supplied by the Captive Review Magazine April 2010 edition.
(See attached file: Captive Review Article April 2010.pdf)

The NZCIA Submission to the Reserve Bank on the Proposed Solvency Standards for Non Life Insurance Companies.
The Association would like to thank Chris McGuinness ( Marsh), Jim Routledge ( Aon) and Peter Lowe ( Willis) for completing this submission

Draft Non-Life Solvency Standard Version 2 - Quantitative Impact Analysis
In order to further analyse the proposed draft solvency approach we would like to continue to assess its effect at an individual insurer level.

A revised Quantitative Impact Assessment (“QIS”) calculation template is attached, which reflects the draft Non-Life Solvency Standard sent to you on 26 February.  If you are able to complete the template - using data from your most recently reported annual accounts - and send it to us, that would be very useful.   All information received will be treated as strictly confidential and will not be available for public release.

If you have a group of companies, the QIS 2 template should be completed for each non-life insurer and a separate consolidated version, including the subsidiaries of the insurer (please refer to paragraph 24 of the solvency standard).

May we request that you complete the QIS 2 template as fully as possible and send it to David Williams (email address is david.williams@rbnz.govt.nz ) by no later than 26 March 2010.  If you have any queries please contact David on 04 471 3748 in the first instance. See attached file: General insurance solvency calculation template QIS 2 - March 2010 (2).xls

Insurance (Prudential Supervision) Bill - Draft Solvency Standard for Non-Life Insurance - Version 2.
In July 2009 the Reserve Bank released for stakeholder consultation a draft Solvency Standard for Non-Life Insurance, and we received more than 30 constructive submissions in response. Later in 2009 we sought inputs to a quantitative impact analysis of the draft Solvency Standard and we received a similar number of responses to this exercise.

Inputs in both areas have informed further development of the draft Solvency Standard for Non-Life insurance, and we now release Version 2 for stakeholder consultation. Stakeholder inputs on this version of the standard will inform the final outcome of this standard.

Some of the key areas that have been amended in Version 2 are as follows:

1. Definitions of Capital and Deductions from Capital have been refined
2. Amendment to the Insurance Risk Capital Charge to now reflect a Premium Liabilities-based model
3. Different handling of the non-insurance capital charge
4. Minimum capital requirements now quantified
5. Variation to the Asset Risk Capital Factors
6. Deletion of the Liquidity Risk Capital Charge
7. Amendment to the Asset Concentration Risk calculation
8. Clarification of the Asset / Liability Mismatch provisions
9. Amendment to the Related Party Assets consideration in respect of Captive Insurers
10. Clarification around Financial Reporting Requirements
11. Clarification regarding Solvency Ratio disclosure requirements
12. Plus a number of other lesser amendments

NZCIA Submission to the Finance and Expenditure Committee on the Insurance (Prudential Supervision) Bill

News Articles concerning the association stand on the Insurance (Prudential Supervision) Bill

• Captive insurance regulations could unregulate industry >
• New Zealand legislative change: unregulated captive threat >
• China Pacific Insurance has no M&A pland despite Hong Kong listing >

New Insurance Legislation allows foreign insurance companies to operate unregulated
New insurance legislation set for its reading in Parliament would create an unregulated insurance industry in New Zealand, says the New Zealand Captive Insurance Association (NZCIA) in a press release.

The NZCIA was commenting on the Insurance (Prudential Supervision) Bill, which will not regulate foreign companies that set up insurance subsidiaries in New Zealand.

A captive insurance company is an insurance entity designed to underwrite the risks of its parent corporation only. Some of New Zealand's most iconic companies, such as Fonterra, Air New Zealand and Carter Holt Harvey, have set up their own captives.

NZCIA President Peter Lowe said the Bill, which was drafted by the Reserve Bank, regulates domestically-owned captives, but does not provide for foreign-owned captives to be licensed, nor to be subject to the offences under the Bill. There are currently six Australian-owned captives set up in New Zealand. "Foreign owned captives are forming in New Zealand and want to be regulated. The Reserve Bank is, by default, encouraging an unregulated foreign insurance industry in this country. This will be extremely harmful for New Zealand's international financial services reputation."

Mr Lowe said the policy decision by the Reserve Bank contrasts with the views of both the OECD and the International Association of Insurance Supervisors. "Captive insurance isn't a new, high-risk industry; there are thousands of these companies set up in the USA, Singapore, Ireland and 40 other regulated countries. There is simply no logic behind this move, nor has any rationale been given to us by either the Reserve Bank or Finance Minister Bill English.

While the industry is still fledgling in New Zealand, there are 22 captive insurance companies currently operating which collectively underwrite $80 million in gross premiums annually and pay New Zealand income tax of $7 million per year.

"With the right regulation, within ten years we believe the industry could grow to 150 captives paying $50 million a year in tax to the Government," said Mr Lowe.

Inside this week's edition of BestWeek Asia/Pacific...

New Zealand's captive insurance industry is aiming for the gradual growth of its business base in the Asia-Pacific region by building on its base of Australian-owned foreign captives and domestic captives.

The Asia-Pacific region's insurance business development and current economic climate will drive demand for captive insurance in the region, said Peter Lowe, president of the New Zealand Captive Insurance Association.

The Insurance (Prudential Supervision) Bill was given its first reading in Parliament on Tuesday December 8th. Submissions to the Finance and Expenditure Committee in respect of the Bill are now invited.

This link is to the New Zealand Parliament website that provides further detail regarding the process. This link will also be posted on the Reserve Bank website.

Please note the closing date for submissions is 10 February 2010. www.parliament.nz

New laws urged to keep captive insurance firms
A lobby group for the captive insurance industry claims New Zealand could miss out on millions of dollars of economic benefits if it does not regulate foreign-owned companies. New Zealand Captive Insurance ... More

Insurance (Prudential Supervision) Bill – first reading - memo to client

Captive insurance regulations could unregulate industry
New insurance legislation could create an unregulated captive insurance industry in New Zealand, the New Zealand Captive Insurance Association says ... More

NEW INSURANCE LEGISLATION ALLOWS FOREIGN INSURANCE COMPANIES TO
OPERATE UNREGULATED See attached file: NZCIA Press Release December 2009.pdf

Article from the National Business Review in New Zealand >>

The Reserve Bank has completed its consultation period and has issued the draft Insurance (Prudential Supervision) Bill to the New Zealand Parliament for its first reading. See attached file: Insurance Prudential Supervision Bill - introduced Oct 29.pdf

NZCIA White Paper on the New Zealand Captive Insurance Industry and the economic benefits for New Zealand. See attached file: NZ Captive Industry Int _9 March_.pdf

The NZCIA presented to Ms Amy Adams, Mr Aaron Gilmore, Mr Raymond Huo and Mr Brendan Burns of the Finance and Expenditure Select Committee. The presentation highlighted the economic value the captive industry is providing to the New Zealand economy.See attached file: Microsoft PowerPoint - Captive benefits - finance Select committee.pdf

The New Zealand Captive Insurance Association has recently submitted testimony to the Reserve Bank on the proposed Solvency Standards for Non Life Insurance companies.

Summary of NZCIA Position to Reserve Bank Prudential Supervision August 2009
See attached file: Summary of NZCIA Position to Reserve Bank Prudential Supervision August 2009

Draft Solvency Standard for Non-Life Insurance, plus Accompanying Discussion Document - The proposed Insurance (Prudential Supervision) legislation will include, in regulations, solvency standards appropriate to both the Life and Non-Life sectors of the New
Zealand insurance industry. A first step toward this requirement has been the development, in conjunction with the New Zealand Society of Actuaries, of a draft Solvency Standard for Non-Life Insurance. (Development work on the solvency standard for life insurance, starting from the existing NZSA life standard, will follow later in 2009). Draft Non-Life Solvency Standard released 06072009.pdf

Draft Prudential Insurance legislation and Risk Management - Literature Review and Submission by Chris Peace of Risk Management Ltd See attached file: RML 2009 0070 Insurance legislation.pdf

New Zealand Captive Insurance Association has submitted testimony to the Reserve Bank on the Draft Insurance ( Prudential Supervision) Bill. The Association will testify in front of the Select Committee when the bill is called. See attached file: NZCIA Submission to Reseve Bank June 22 2009.pdf

Ernst & Young is pleased to send the NZCIA it's latest Insurance Accounting Alert: This is a series of papers, designed to alert insurance executives to IASB/FASB activity on insurance contracts. See attached file: E&Y Insurance Accounting Update June 2009.pdf

Minter Ellison Rudd Watts and Deloitte would like to invite the members of the NZCIA to our Anti-Money Laundering Seminars:

• Christchurch on Monday 8th June
• Wellington on Tuesday 9th June
• Auckland on Wednesday 10th June

Insurance (Prudential Supervision) Bill Draft April 09
Download PDF >>

New Zealand Captive Insurance Association Press Release 5 May 2009
The Reserve Bank of New Zealand has released “Insurance (Prudential Supervision) Bill” draft for consultation.  The Reserve Bank is asking for submissions by interested stakeholders no later than 22 June 2009.  The Association is conducting a review of this draft legislation and in consultation with its members, will respond to the Reserve Bank on the matters discussed in this draft legislation.

Willis ART / Captive Consulting Practice
Willis is pleased to announce that the Willis ART / Captive Practice has secured André Kyburz’ services as a Consultant.

André is a qualified Chartered Accountant with a Bachelor of Economics, Certified Insurance Professional, Member of the Australian & New Zealand Institute of Insurance & Finance and a Certified Finance & Treasury Professional.

André is considered to be one of Australia’s leading Risk Financing Specialist having worked both in Captive Management and Alternative Risk Financing for major consulting organisations. André brings international insurance experience and ART expertise including designing and placement of international reinsurance programmes, conducting captive feasibility and discretionary mutual fund studies and audits. He has provided risk finance advice and consulting services to major Australian organisations including the incorporation of numerous captive insurance companies in the Australasian market.

The Willis ART / Captive Practice is pleased to have André contributing to the team to further enhance the service Willis can provide to its clients in this highly sophisticated area of insurance and risk management.

International Association of Insurance Supervisors - Guidance Paper on the Regulation and Supervision of Captive Insurers >>

Reserve Bank Cabinet Paper July 2008 >>
REVIEW OF FINANCIAL PRODUCTS AND PROVIDERS: PRUDENTIAL REGULATION OF INSURANCE

NZCIA commentary and submission on Cabinet & Economic Development Committee Office of Finance Cabinet Paper >>

Meeting with the Reserve Bank
On 24 June we met with Richard Dean and David Williams of the Reserve Bank and
presented information papers and our comments on the Reserve Bank discussion
paper. From their responses it seems fair to say that the Reserve Bank understands
our submissions and position and will take these into account when developing draft
legislation for introduction to parliament. This draft legislation will then be subject to
scrutiny by Select Committee and MPs as well as public submissions.

Asia Pacific Rendezvous
The Asia Pacific Rendezvous 2008 is being held in Singapore on July 10 and 11. The President of the NZCIA, Peter Lowe, is speaking on Domicile Panel with representatives from Singapore, Hawaii Vanuatu, Hong Kong, Labuan and Guam. The organiser have offered Speaker discounts of 25% for NZCIA members. Agenda and entry form >>

Review of Financial Products and Providers
Prudential Regulation of Insurance consultation Document >>

NZCIA submission to the Reserve Bank of New Zealand >>

Latest Press Release >>

Reserve Bank welcomes new insurance responsibilities
Date 17 December 2007
Reserve Bank Governor Alan Bollard today welcomed the Cabinet decision that the Bank will take on new responsibilities under a regulatory framework for the prudential regulation of the insurance sector.

The prudential framework will apply to all insurance providers, including life, health and general insurance.

The Bank’s role as regulator and supervisor of the insurance sector will include licensing insurers and enforcing disclosure requirements, including a mandatory rating of an insurer’s financial strength.

Dr Bollard said the prudential requirements will not be overly prescriptive and will place emphasis on directors’ responsibilities to effectively manage the risks within their businesses. The objective of the new prudential requirements will be to encourage the maintenance of a sound and efficient insurance sector that promotes confidence among policyholders.

“The insurance sector is an important part of the financial system which underpins economic activity,” Dr Bollard commented. “Policyholders need to have confidence in insurance providers that insurance claims will be honoured. While prudential supervision can never eliminate the possibility of failures within the sector, licensing of all insurance providers helps to ensure that minimum requirements are applied to the sector in a consistent manner.”

The Reserve Bank will consult with stakeholders in developing the necessary regulations.
Legislation will be introduced in 2008, and is expected to be brought into force at some point in 2010.

NZCIA meeting with Reserve Bank of New Zealand - Insurance Company Regulation
Recently Mr Warren Maslin, Mr Patrick Vandernoll and Mr Peter Lowe meet with Reserve Bank of New Zealand officials Margaret Griffin and David Williams. during this meeting the NZCIA explained our position of the proposed legislation and why captive insurance companies should be exempt from sections of the legislation. Please find attached the information provided to the Reserve Bank. See attached file >>

The NZCIA donated a number of conference bags to the Wairau Valley Special School. The donation was organised by Patrick Vandernoll whose wife is a teacher at the school. The students have given the Association a painting of Auckland as a thank you. Read their thankyou letter >>

New Zealand Captive Insurance Legislation - the Future >>
By Sabina Binkelmann, DLA Philips Fox, Auckland, New Zealand
[PowerPoint file, 158KB]

Australian Prudential Regulation Authority (APRA) - 31 July 2007
Discussion Paper -
Refinements to the General Insurance Prudential Framework >>

Captive law: Global evolution of captive insurance legislation >>
Captive & Art Review, June/July 2007

Asia Pacific Captive Conference >>

Latest IBANZ Member Newsletter outlining the Commerce Ministers Announcement regarding Financial Sector Changes >>

Australian Prudential Regulatory Authority (APRA) announcement on DOFI's >>

New Zealand Captive Conference >>

• Seminar photos from the inaugural NZCIA captive conference >> [PowerPoint file 5,576KB]
• Overview of Speeches form the Captive Insurance conference >> [Word file]
• Media release - Own-your-own insurance company – a big step with many benefits >> [Word file]

Ministry of Economic Development Summary of Submissions

• Notification from the Ministry of Economic Development >>
• Financial Intermediaries Discussion Document: Summary of Submissions April 2007
• Support for rules for Finacial Services sector - Minitsre of Commerce Media Statement

NZCIA submission to the Ministry of Economic Development discussion document
"Review of Financial Products and Providers":

• Covering letter to Ministry of Economic Development >>
• NZCIA Submission >>
• NZCIA Submission Part 2 >

Captive Insurance Companies >>

Business Law Reform Bill:

• Business Law Reform Submission 2006 >>
• Business Law Reform Letter to Daizel 2006 >>
• Dalziel Letter 8 August 2006 >>
• Dalziel Letter 12 September 2006 >>

Review of Financial Products and Providers: Discussion Documents:

• Ministry of Economic Development Letter >>
• Overview of the Review and Registration of Financial Insitutions >>
• Consumer Dispute and Redress >>
• Insurance >>

Decision Making in Uncertain Times
3rd National Conference on Risk Management >>
www.risksociety.org.nz

Reinsurance Overview. This document discusses the evolving shape of the international reinsurance market >>
Willis June 2006

A captive audience - The slowing growth in new captive formations does not mean risk managers’ enthusiasm for this form of risk transfer has waned >>
Reactions May 2006

Australian Treasury discussion paper:

Regulation of Discretionary Mutual Funds and Direct Offshore Foreign Insurers >>
NZCIA Response to Australian Treasury discussion paper >>

Captive Insurers - Developing Appropriate Criteria to Exempt them from Prudential Regulation:

NZCIA Response to NZ Treasury >>
NZ Ministry Acknowledgement >>

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