The Reserve Bank of New Zealand – Te Pūtea Matua (RBNZ) has initiated the final phase of policy consultation concerning the revision of the Insurance (Prudential Supervision) Act (IPSA) 2010.

This comprehensive consultation document presents a complete array of proposed amendments to the legislation. The propositions stem from prior consultations and mark the concluding policy consultation for the IPSA review.

This current phase entails an omnibus consultation, encompassing a comprehensive set of proposals for IPSA amendments. While most proposals have roots in prior consultations and feedback, a few new areas are open for consultation, including statutory purposes and principles, policyholder protection ideas, and specific areas soliciting further stakeholder input on a narrowed range of options.

Deputy governor Christian Hawkesby said that the Reserve Bank's prudential oversight of the insurance sector plays a critical role in ensuring its stability and efficiency in New Zealand, bolstering public trust.

“The proposed changes will support the Reserve Bank’s evolution from light touch supervision towards a more proactive and intensive approach that is more closely aligned with international best practice,” Hawkesby said in a news release.

These proposals would give the RBNZ a widened set of supervisory and enforcement tools with use cases ranging from remedial action to address risks to robust measures versus serious breaches.

“We will be able to set out clearer and more enforceable rules in areas such as governance and risk management, making us better equipped to address emerging issues such as cyber security and climate,” Hawkesby said.

For more detailed insights, the RBNZ also provided an accompanying non-technical summary and consultation paper. Submissions addressing the policy questions outlined in this comprehensive consultation will be accepted until Dec. 12.

Once the policy framework is finalised, a subsequent phase of consultation will be initiated, focusing on an exposure draft of an IPSA Amendment Bill, expected to commence in early 2025.

Recently, the RBNZ also published a bulletin that presents key insights derived from a survey of prudentially regulated entities about climate change.

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