Resolution Life – which needed the go-ahead from both the Australian Prudential Regulation Authority (APRA) and the Reserve Bank of New Zealand (RBNZ) for its AMP Life purchase to push through – has now secured the green light.
The UK-headquartered life insurance group said RBNZ’s approval, announced on June 23, was the last regulatory nod required towards the completion of the acquisition. It comes after an 18-month review aimed at ensuring that the AMP Life transaction satisfied the regulator’s requirements.
“Because AMP Life is a branch of an Australian business and intended to be in ‘run-off’ and not write new business, special arrangements were needed for the security of New Zealand policyholders,” said Geoff Bascand, RBNZ deputy governor and general manager for financial stability.
“A bespoke trust model has been established that ensures supervisory objectives are better met, future industry dynamics are generally more positive, and there is additional protection in the event of insolvency – one of the key risk considerations that we have been seeking to mitigate.”
In making its decision, RBNZ liaised with APRA and also considered advice from an independent actuary.
The abovementioned model sees the formation of Resolution Life New Zealand (RLNZ), a locally incorporated insurer that will act as Trustee to the Trust. Under the conditions imposed, the Trust is mandated to hold capital and assets in New Zealand that help provide long-term security for policyholder benefits or investments, where relevant.
Meanwhile Resolution Life said the RLNZ board will be chaired by Anne Blackburn.