Latest Captive Insurance News
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
If you wish to comment on Version 2
of the draft standard, please send your responses by replying
to this Email. The closing date for responses to this consultation
will be 26 March 2010. See
attached file: Draft Solvency Standard for
Non- Life Insurance Version 2.doc
Minter Ellison has provided the
following document for our members:
Financial Services Update. See attached file: AML15Feb2010.pdf
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
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:
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 >>
Ministry of Economic Development
Summary of Submissions
NZCIA submission to the Ministry of Economic
Development discussion document
"Review of Financial Products and Providers":
Captive
Insurance Companies >>
Business Law Reform Bill:
Review of Financial Products and
Providers: Discussion Documents:
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 >>
|
Business to Business Risk and Insurance