Practice runs for insurer data collection required by the industry’s regulator, the Reserve Bank of New Zealand, have been postponed to February next year instead of November this year due to the amount of feedback received.
Insurers raised their concerns during workshops held in Auckland and Wellington during September and in written form there were 32 submissions made.
Among their concerns was the need for more time to plan and allocate the resources needed to participate in the practice submission, and more time between the practice and the implementation so that RBNZ could review and modify the templates accordingly if necessary.
In its review paper, RBNZ said: “The Reserve Bank expects that the reporting of solvency data in the new solvency templates will be introduced from early 2015 in line with insurers’ respective half-yearly reporting requirements.
“For example, for insurers with a financial year starting on 1 April, the first six month period covers April to September 2015 and the solvency return is due at the end of January 2016.”
Other concerns were that the requirements were too granular and that standardisation of data across the various insurance business types could result in definitions conflicting with normal insurance business practice.
RBNZ said it was reviewing terminology and data definitions for all its templates and intends to provide further clarification to minimise the room for ambiguity.
Issues of commercial sensitivity and security and use of data were also raised.
One of the topics most commented on was the proposed reporting schedule for insurers submitting a half-yearly and annual return and for those insurers requested to participate in a quarterly survey.
Insurers envisaged problems would occur due to the high workload at those times making the quarterly insurer survey difficult and therefore suggested either the quarterly reporting be removed altogether or the range of insurers be expanded to include more.
RBNZ responded saying it acknowledged the tension between the work required for preparing the half-yearly and annual returns and the quarterly survey.
“In response to the feedback received the Reserve Bank has revised the proposed reporting period for the quarterly survey from six to eight weeks, and has cut back on the volume of data requested in the survey.”
RBNZ has also revised the premium threshold from greater than $100 million down to $50 million or greater, resulting in a larger number of insurers subject to quarterly reporting.
The variety in reporting systems in place with each insurer affect the costs involved in complying with the new requirements with some experiencing little cost while others have to make significant investments and therefore extending the length of time needed in order to comply.
RBNZ requested that insurers record the time taken to complete each data template to enable future reviews.
Interested parties are invited to comment on the changes made by 12 December.
Read the full RBNZ paper here