The Reserve Bank of New Zealand (RBNZ) has been carefully reviewing the proposed AMP Life sale to ensure that its 200,000 New Zealand policyholders will be protected.
The RBNZ said it would consider Resolution Life’s proposal to buy AMP Life for AU$3 billion if the change of ownership would not alter the insurer’s ongoing eligibility to retain its New Zealand license.
It would also base its decision against criteria in the Insurance Act 2010, such as the insurer’s ability to continue its business in a prudent manner, the insurer’s incorporation and ownership structure, and how the change of ownership will affect the solvency of the insurer.
“We understand that policyholders have a strong interest in this process. We support active and ongoing communications between AMP Life and its policyholders to ensure that policyholders have adequate information to understand the implications of the proposed change,” Deputy Governor Geoff Bascand said.
“Although effective disclosure of key information is a core part of New Zealand’s prudential regulation regime, the law restricts when the Reserve Bank may disclose information in place or on behalf of insurers as well as its own deliberations.”
Bascand offered assurances that the sale would not change AMP Life policyholders’ contractual entitlements and would not affect their right to enforce their contract if these entitlements have not been met.
However, the RBNZ is unsure how long the approval process may take, as it is still waiting to receive all of the required information to make the decision.
“We note that this type of transaction, as it has been proposed, is not unique to New Zealand. Internationally, there has been a trend of consolidating ownership of life insurers into global specialist life insurers,” Bascand said.