Graham Kennedy: Insurance (Prudential Supervision) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeGraham Kennedy: Insurance (Prudential Supervision) Amendment Bill — Second Reading[Sitting date: 20 August 2013. Volume:692;Page:12653. Text is incorporated into the Bound Volume.]Dr KENNEDY GRAHAM (Green):The objective of this bill before us the Insurance (Prudential Supervision) Amendment Bill is to amend the Insurance (Prudential Supervision) Act 2010 which established a licensing and prudential supervision regime for insurers operating in New Zealand. The amendments are claimedto have the aim of improving the Act’s effectiveness and ensuring a smooth transition to full licensing of insurers by first amending the provisions that are unnecessary; second amending provisions that impose unwarranted compliance costs; and third addressing so-called technical issues. The amendments are described as generally minor and technical in nature and indeed they have been described by colleagues especially from Labour several times in the House tonight as housekeeping. So that is the objective.What is in the content of the bill? There are nine technical changes to the prudential requirements pertaining to the insurance industry. Let us look at a few of them. Firstly the amendments will include things like allowing the Reserve Bank to exempt a licensed insurer from the requirement to have a current financial strength rating if the insurer has stopped writing new contracts. Secondly it would allow overseas insurers to use the accounting rules that apply in their home country for interim financial reporting rather than adhering to New Zealand’s own accounting practices. Thirdly it would require the Reserve Bank to keep a public register of all licensed insurers while dropping the requirement for it to be made available on the bank’s website. Fourthly it would make any offences under the principal Act category 3 offences as defined by the Crimes Act thereby creating a statute of limitations of 5 years.The bill was referred after the first reading to the Finance and Expenditure Committee on I think 8 May. Enough time—5 weeks or so—was allowed until the closing of submissions on 14 June. As David Clark has pointed out only four submissions were actually made and in fact only two were heard by the committee. So this housekeeping is scarcely an earth-shattering event. The recommendations that came back from the select committee were minor as the committee itself described them. There were some changes to clause 11 extending the deadline for interim financial information from 3 months to 4 months. There were changes to clause 16 pertaining to provisional licences and to section 246 in clause 16 on that subject as well. These are minor changes to a technical bill.In its essence the bill is seeking to relax the regulatory framework and this is the wrong time to be doing this—in a post - global financial crisis environment. The housekeeping that we are talking about is the wrong kind of housekeeping. It is tidying up some simple matters but heading in the wrong direction. On that basis the Green Party opposed this bill in the first reading. The minor amendments recommended by the select committee change nothing. The Green Party will continue to oppose the bill.