Genter Julie Anne: Insurance (Prudential Supervision) Amendment Bill — First ReadingText is incorporated into the Bound VolumeGenter Julie Anne: Insurance (Prudential Supervision) Amendment Bill — First Reading[Sitting date: 08 May 2013. Volume:689;Page:9837. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green): I rise to take a call on the first reading of the Insurance (Prudential Supervision) Amendment Bill. I will begin by saying that the Green Party has decided that we cannot offer support to this bill at the first reading and there are several reasons for this.Firstly the principal legislation the Insurance (Prudential Supervision) Act was supported by the Green Party. We think it is extremely important to have good regulatory oversight and good prudential requirements for the insurance industry so we were very supportive of that bill throughout the whole process. What this amendment bill seeks to do is make nine very technical dry changes to the prudential requirements for the insurance industry which are set to come into law in September 2013. The changes were recommended by the Reserve Bank. They include things like allowing the Reserve Bank to exempt a licensed insurer from the requirements to have a current financial strength rating if the insurer has stopped writing new contracts. It allows overseas insurers to use accounting rules that apply in their home country for interim financial reporting rather than adhering to New Zealand’s accounting practices. It requires 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—interestingly. It makes any offences under the principal Act category 3 offences as defined by the Crimes Act creating a statute of limitations of 5 years.The main changes recommended in the bill move in the direction of lighter regulation in some highly specific circumstances such as the case of an insurance company that has stopped issuing new insurance. This controlled relaxing could make sense; however our concern is that it is happening in an industry that is characterised in New Zealand by a few dominant foreign-owned players that are too big to fail. We believe that particularly in a post - global financial crisis world in a world where the insurance industry globally is facing increasing threats—and in New Zealand we saw after the natural disaster of the Christchurch earthquake that it had quite serious repercussions for AMI which was our largest New Zealand - owned insurer. In the post - global financial crisis world and in a world where we can anticipate more frequent serious severe weather incidents that will undoubtedly result in insurance companies having to pay out more it is not the time to be moving towards lighter regulation. We could be convinced through the select committee process but it will take that processfor us to fully understand the total ramifications and implications of the changes in this bill.I note that another reason for not supporting it tonight is that there was no regulatory impact statement accompanying this bill so we have got no reason for these particular changes that is fleshed out in detail and fleshed out in a way where we feel we have been able to understand that the officials have looked at the changes have thought about all the implications and have assessed the risks and the advantages of these changes. Given the dearth of information about the bill we simply cannot support it this evening. That is all I have to say. Thank you.