The NEW ZEALAND GENERAL INSURANCE module informs any entity planning to operate a general insurance business in New Zealand what their legal obligations are and what procedures and processes they should have in place to ensure compliance.
The NEW ZEALAND GENERAL INSURANCE module covers all legislated obligations of general insurance providers in New Zealand from obtaining a licence and operating the business through to dealing with complaints and potential penalties for breaches. The module provides the practical assistance and guidance to ensure that these obligations are complied with and how to establish and maintain best practice processes. The module also covers possible exemptions to the obligations, if applicable, and how they may or may not apply to the insurance provider. The 15 specific topic areas comprehensively covered by the module are;
- The process for obtaining a licence to operate a general insurance business;
- Obtain a licence from the Reserve Bank of New Zealand (RBNZ) which is the regulatory authority in New Zealand before advertising or conducting any transactions.
- The registration requirements of financial service providers;
- Ensure that all registration requirements are met throughout the operation of the business.
- Maintaining a licence to carry on an insurance business;
- Establish and maintain systems, policies and processes to ensure ongoing compliance.
- Meeting ownership and governance requirements;
- Ensure that appropriate incorporation and ownership structures are in place;
- Ensure appropriate composition and independence of the board;
- Ensure that directors and/or officers fulfil fit and proper requirements; and
- Establish relevant board committees.
- Maintaining solvency margins and standards;
- The licence may be subject to conditions requiring the licensed insurer to maintain a solvency margin in accordance with an applicable solvency standard.
- A risk management program;
- Establish and maintain an adequate risk management program;
- The program must be in writing; and
- The program must set out the procedures for the effective identification and management of various risks including insurance risk, credit risk, liquidity risk, market risk and operational risk.
- Auditors and actuary requirements;
- Keep proper accounting records, prepare financial statements, have those financial statements audited, and lodge those financial statements with the Registrar of the Companies Office; and
- Financial statements must be reviewed by an appointed actuary.
- Transfer and amalgamation of general insurance business;
- A transfer or amalgamation of all or part of an insurance business, including a business conducted or owned by overseas insurers, must follow the appropriate process including obtaining prior, written, approval of the RBNZ.
- Levy collection;
- The insurer must ensure that it collects the right amount of premium payable and send the appropriate information to the Earthquake Commission.
- Reporting, record keeping and financial statements;
- The insurer or reporting entity must ensure that it is able to keep proper accounting records to assist the preparation of compliant financial statements or group financial statements.
- Consumer protection in relation to the provision of general insurance;
- Complying with disclosure requirement of the insurer’s current financial strength rating to the policyholder;
- Avoiding discrimination;
- Disclosing key features of the policy;
- The appropriate management of claims and complaints;
- Justification for relying on data, advice or opinion to provide insurance on different terms and conditions for each sex, persons with disability or for persons of different ages;
- Staff to receive training on how data, advice or opinion should be used and relied on;
- Review policies and procedures;
- Prepare a product disclosure statement (PDS) and lodge the PDS with the Registrar.
- Insurance and tax;
- The consequences and penalties for non-compliance with insurance and tax requirements.
- Dispute resolution;
- Requirement to be registered on the Financial Services Providers Register as maintained by the Companies Office.
- Requirement to belong to an approved external dispute resolution scheme.
- Investigations and enforcement;
- General directors' duties, investigation procedures and any enforcement obligations imposed by the RBNZ and Financial Markets Authority New Zealand (FMA) must be followed.
- Distress management;
- Requirement for an insurer in financial distress to comply with any recovery plans and direction by the RBNZ; and
- Requirement to comply with voluntary administration, liquidation or statutory management if required.
In covering these topics the module provides an overview of legislation which significantly contributes to the obligations that general insurers need to comply with, including;
- Companies Act 1993 (NZ)
- Insurance (Prudential Supervision) Act 2010 (NZ)
- Financial Services Providers (Registration and Dispute Resolution) Act 2008 (NZ)
- Fit and Proper Standard (NZ)
- Solvency Standard for non-life Insurance Business 2014 (NZ)
- Financial Markets Authority (Levies) Regulations 2012 (NZ)
- Financial Markets Conduct Act 2013 (NZ)
The NEW ZEALAND GENERAL INSURANCE module covers the obligations of general insurance providers operating in New Zealand. It does not cover obligations that are specific to specialised areas of insurance for example life insurance.