FMA extends audit deadline for insurers

FMA extends audit deadline for insurers | Insurance Business New Zealand

FMA extends audit deadline for insurers

The FMA has given insurers, banks and non-banks an extra two months to turn in their audited financial statements, giving them extra time to “assess the impact of COVID-19 on their businesses.”

The regulator says the COVID-19 situation is throwing up various issues for many financial entities and audit firms, and it is looking to take “appropriate steps” to support the industry.

It says financial services providers need time to assess exactly how their business has been impacted, and to navigate the delays caused by travel restrictions, social distancing and working from home arrangements.

“In light of these extreme circumstances, the FMA has determined to provide regulatory relief, by way of a class exemption, which will allow entities and schemes who are impacted by COVID-19 an additional two months to produce their audited financial statements,” the FMA said.

“This means they will have six months, rather than four months, to complete this work.”

This comes after the Reserve Bank’s announcement that it will be delaying several of its regulatory initiatives for six months, including the long-awaited insurance contract law review.

Reserve Bank governor Adrian Orr commented that the impact of the virus on New Zealand’s economy is likely to be “significant,” and with New Zealand having closed its borders to non-residents, its impact on travel and spending will only increase.

“Suffice to say that over recent days…the negative economic implications of the COVID-19 virus are becoming clearer and significant,” Orr said.

“Global trade, travel and business and consumer spending have been curtailed significantly.

“Demand for New Zealand’s goods and services will be constrained, as will domestic production, and spending and investment will be subdued for an extended period.”

Despite this, Orr says that New Zealand is in a strong economic position, and that its key financial institutions are well positioned to absorb the shocks.

“We are in a strong economic position at present,” Orr said. “Inflation is low and stable, and employment has been around its maximum sustainable level. Second, our financial system remains sound and our major financial institutions are well capitalised and liquid.”

“I want to urge New Zealanders to communicate with the financial institutions that serve you, and discuss any concerns that you may have,” he added. “This is the time to over-communicate.”