Geoff Bascand: Promoting the soundness and efficiency of our insurance sector - recommencing the IPSA and Solvency Standard review

Speech by Mr Geoff Bascand, Deputy Governor and General Manager of Financial Stability of the Reserve Bank of New Zealand, to the Insurance Council of New Zealand, Wellington, 14 September 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

Back in March, I was ready, speech in hand, to provide you all with an insurance update, particularly in relation to our plans for the review of the Insurance (Prudential Supervision) Act, or IPSA, that we started in 2017.

As with many things, COVID-19 intervened. My pandemic insurance was I could always do it later! As I update this speech, different alert level requirements are in place. Again, just like many things I'm contemplating whether I might have to defer again, or do it differently - can one get insurance for multiple, repeated and arguably expected phenomena?

To some degree, this story is a metaphor for the IPSA review. We have started and stopped it a couple of times, due to competing priorities for us and industry. We are now recommencing it. We are confident we can do so sustainably, even with pandemic risks surrounding us.

The IPSA and associated Solvency Standard review, including our approach to the review and its timetable, are the main focus of my address today. I'll also provide feedback on our view of the insurance sector's handling of the pandemic so far, as well as an update on the Appointed Actuary Thematic Review, some comments on issues that were significant before COVID-19 and remain in play, and an update on our supervisory approach, including our Auckland presence.