Lotu-Iiga Peseta Sam: Insurance (Prudential Supervision) Bill — Second Reading 
Lotu-Iiga Peseta Sam: Insurance (Prudential Supervision) Bill — Second Reading 
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PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I also rise to support the Insurance (Prudential Supervision) Bill. As has been acknowledged across the House the bill was required to consolidate the industry and bring it under prudential supervision. The bill is part of a suite of reforms that this National Government has put in place to return confidence and trust to our capital markets and to return confidence and trust to our businesses and to our export businesses in particular. 
This bill replaces outdated and disjointed legislation. It fills some of the gaps that currently exist in the prudential regulation of this industry and it removes some of the inconsistencies in the legislation for the insurance sector. In a light-handed way it provides for the delivery of regulation so that we do not mire the industry in a compliance mentality. The bill focuses on licensing and prudential regulation as many speakers have already alluded to. It provides for all insurers to be licensed and supervised by the Reserve Bank and to comply with its prudential regulations. The Reserve Bank will act as both the regulator and the supervisor. 
As I have already stated this bill is part of a suite of measures to promote a sound and efficient insurance industry and to promote confidence. This year we have already provided legislation for financial service providers and financial advisers. We are reforming securities trustees legislation. The Financial Markets Authority legislation will be in the House later this year. It is part of a comprehensive review of securities markets—the Securities Act in particular—that will come into this House early next year. 
The bill covers a number of categories of insurers—life non-life and medical. It did present some issues particularly amongst non-resident insurers and foreign insurance companies that we had to deal with in terms of providing a level playing field for our local insurers which some speakers have already alluded to. In considering those matters I thank the officials some of whom are here for the work that they did on what is a reasonably complex area of the law and for helping of the Finance and Expenditure Committee assess some of those complex issues. We heard about 31 submissions orally and 57 were submitted in written form. I commend the industry for bringing a lot of those submissions and a lot of the issues contained in the initial bill to our committee. The nature of its submissions was quite comprehensive. 
So what does the bill do? I will touch briefly on a couple of issues because we will be dealing with specific clauses in the Committee stage. One submission was to put certain categories of provider outside the scope of the bill. We have already heard about discretionary mutuals trade associations and union groups which provide limited coverage that is incidental to their primary purpose and that is really important. We had similar carve outs in the financial service providers legislation which we dealt with last month. Similarly it was important to recognise that we do not want to over-regulate those enterprises and organisations that do not properly fit within the category of insurance companies. We also dealt with the smaller type of insurance company. We limited the exemptions in that regard because we wanted to manage some of the compliance costs that these types of businesses experience. 
There are a whole host of other recommendations in the select committee’s report back to the House. One of them was that the Reserve Bank publish a list of approved overseas regulators for assessing home and host regulatory recognition treatment of branches of overseas insurers. That provision was particularly important too. 
This bill has received widespread support across this House. It is a bill that was started under the last Labour Government but the National Government is happy to take it on implement it and enact it. I commend the bill to the House.