Adams Amy: Insurance (Prudential Supervision) Bill — In Committee Third Reading 
Adams Amy: Insurance (Prudential Supervision) Bill — In Committee Third Reading 
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AMY ADAMS (National—Selwyn) 
: 
 It is a pleasure to take a call on the third reading of the Insurance (Prudential Supervision) Bill. Before I get into the detail of my contribution I acknowledge the previous speaker for making an interesting and thought-provoking contribution. It was one of the few speeches this morning that actually focused on the insurance sector and I found that quite refreshing so I thank Mr Clendon for that. 
As we have heard across the debate on this bill’s passage through the House this bill focuses on ensuring that our insurance sector is robust and that the public can have confidence in it. It is one of a number of measures that have been taken around the supervision of various entities within the financial sector. There has been quite some discussion around the need for care in that area and certainly that view is shared across the House. But we do have to be careful I think when we are talking about prudential supervision not to get caught up in the hysteria of concern around one aspect of the financial sector and use that heavy-handed and emotion-fuelled response to deal with all aspects of the sector. 
The aspect of the bill I want to focus on in my contribution is that yes the insurance sector must be regulated; yes we need to bring it into line with international benchmarks and that is certainly what this bill is doing; and we need to ensure that there can be public confidence in what is a very important sector for all New Zealanders. What we have to be careful of though as we must with any regulation that we bring into existence is the need to have a balanced and appropriate response to the scale of the issue in this sector. We are not talking about finance company failures we are not talking about banks and we are not talking about some other more worrying aspects of the financial sector. We are talking about the insurance market in this bill. 
As my friend Mr Foss said in an earlier contribution this is not where the problem has been in terms of New Zealanders losing vast quantities of money. We recognise that the insurance sector needs to be appropriately regulated and I think that giving the Reserve Bank the power to ensure that all insurance companies that carry on business in New Zealand need to be licensed and subject to various prudential supervision requirements which we can talk about later is an appropriate step. But we have to be mindful of the need to be balanced in our response. 
The Minister of Internal Affairs in his contribution at the beginning of the debate described the bill as sensible and well targeted and I think that is exactly right. But I would add to that comment the word “balanced”. The challenge we always have is to ensure that our response is balanced and appropriate. Maryan Street in her contribution referred to it as baby steps. If Labour had a view of what else needed to be done to regulate insurance companies we certainly did not hear it from Labour members during the select committee process. If this is a baby step I challenge those members to tell us what in the insurance sector— 
Stuart Nash 
: No she wasn’t talking about this bill Amy—she was talking about the whole area of monetary policy. 
AMY ADAMS 
: Well she was making a speech on this bill I say to Mr Nash so it is not unreasonable to assume that she was speaking about it although it might be an unreasonable assumption to make that Labour would actually talk about the bill in front of us. But she referred to it as baby steps and I disagree with that. In terms of the insurance sector this is exactly the appropriate response needed for the level of actual risk and concern. 
It is worth pointing out that the powers that can be exercised under this bill have to be exercised for the purposes of promoting public confidence in the sector. That is the test. We do not need to regulate for the sake of it. There is no point in measuring the success of our supervision programme by the sheer quantity of red tape we create. We have to ensure that what we have done is no more than necessary because let us not forget that any time we put compliance costs on business—and insurance companies are no different—that cost is passed through to consumers. If we care about keeping down the costs to consumers we have to be mindful of not over-regulating. 
This bill is an appropriate response to the challenges faced by the insurance sector. I think the amendments made by the Finance and Expenditure Committee which I described in my second reading contribution will assist in getting that balance right. We now have a response that is appropriate that is well considered and that will serve the needs of this sector and the New Zealand public. I thank the House for working for the large part collaboratively and constructively on this bill during its passage through the House. It is certainly good to see such important legislation having widespread support in the House. I take the opportunity once more to commend the bill to the House. Thank you.