The Reserve Bank of New Zealand (RBNZ) has issued formal directions to Pacific International Insurance over its repeated failings with its regulatory reporting.
According to a statement by the central bank, the directions were made under section 143 of the Insurance (Prudential Supervision) Act 2010. Section 143 gives the Reserve Bank the ability to direct a licensed insurer to carry on its business in a specified way and/or take certain specified actions to address regulatory failures.
This action, RBNZ said, follows warnings issued to Pacific International in 2018 for failing to include its solvency ratio in its New Zealand branch financial statements for three consecutive years.
As a result, the central bank has ordered Pacific International to strengthen, monitor and continuously improve its compliance systems, controls and processes, and to obtain independent verification of the improvements in a year’s time.
“Pacific International Insurance has a poor history of non-compliance with its regulatory requirements relating to reporting, disclosure and notification,” RBNZ deputy governor and general manager of financial stability Geoff Bascand said.
“Despite these warnings, Pacific International committed further breaches relating to reporting, disclosure and notification requirements. In January 2020, the Reserve Bank instructed Pacific International under section 126 of the Act to commission an independent report on its systems, regulatory processes, resources and oversight controls.”
If the company fails to comply with the direction, it could be fined $500,000. Individual offenders can face up to three months’ imprisonment or a fine of $200,000.
