Goldsmith Paul: Insurance (Prudential Supervision) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeGoldsmith Paul: Insurance (Prudential Supervision) Amendment Bill — Second Reading[Sitting date: 20 August 2013. Volume:692;Page:12650. Text is incorporated into the Bound Volume.]PAUL GOLDSMITH (National):It is my pleasure to speak on the Insurance (Prudential Supervision) Amendment Bill. I think it is good to see widespread agreement across the House in support of this bill although we have not yet heard from the Greens or New Zealand First. This is an area of insurance that is of great concern to many households in the country at the moment. It is second only I suppose to local body rates which are always going up rapidly. Insurance costs have been rising considerably in the last few years as a result of the Canterbury earthquakes. When those earthquakes struck all New Zealanders did have to ultimately face a higher price for their insurance as the industry recalibrated its assessment of risk in New Zealand as we have been forcibly reminded that we live in these shaky isles.The bill is very important for building a more competitive and productive economy which is indeed very much one of the key goals of this Government that we make sure we have a well-functioning and efficient insurance sector. That was indeed the purpose of the Insurance (Prudential Supervision) Act which was passed in 2010 and one consequential amendment of the Reserve Bank of New Zealand Act in 1989. All in all the Insurance (Prudential Supervision) Act has proven to be very effective and robust but it is not unexpected that there would be one or two provisions that would be in line for some reform 2 or 3 years out and that indeed is the purpose of this bill which is really to tweak a few matters that require some attention further down the line.The Act establishes a licensing and prudential regulation regime for all insurers and all insurers are to be licensed and supervised by the Reserve Bank and must comply with prudential requirements. Some of these reforms in the amendment bill ensure that the provisions in the current Act do not expose insurers or the Reserve Bank to operational complications at the end of the transition period. One reform relates to the interim financial reporting that is prepared in accordance with New Zealand generally accepted accounting practice requirements. The proposed amendments allow the Reserve Bank to specify another basis for reporting by overseas insurers so they are not having to be running two different sets of accounts in a very complicated manner in order to deal with their regulatory requirements here.I would just like to thank all members of the Finance and Expenditure Committee who worked very hard on this bill. The committee received four submissions. The number was not great but the overall interest in the bill was substantial. We heard from two submitters directly recommending a change to the provision of interim financial information requirements. The committee recommends extending the period by which interim financial information must be reported to the Reserve Bank from 3 to 4 months. I remember that one of the submitters suggested 5 months but I think they all agreed that going to 4 months made sense as it would align with the time frame for annual reporting recommended by the Commerce Committee in the Financial Reporting Bill.The other reform relates to the extension of the term for provisional licences or insurers that enter into insolvency procedures before 7 September 2013.All in all I thank the members of the committee and the officials who worked very hard on this bill. I have no doubt that when passed it will add some greater assurance to the sector in the hope that over the next few years in what is proving to be a difficult sector in the New Zealand economy as we come to terms with the complications and the consequences of the Canterbury earthquakes this legislation will serve us well. Thank you.