Insurance (Prudential Supervision) Act 2010

1: Title
This Act is the Insurance (Prudential Supervision) Act 2010.
2: Commencement
1: Section 1 Part 1 sections 36 55 to 58 62 103 230 to 238, and 241(1) Schedule 1 Part 1
2: Section 242
3: The rest of this Act comes into force on a date appointed by the Governor-General by Order in Council; and 1 or more orders may be made bringing different provisions into force on different dates.
4: To the extent that it is not previously brought into force under subsection (3), the rest of this Act comes into force on the day that is 18 months after the date on which this Act receives the Royal assent.
5: Subsection (4) is subject to subsection (2).
6: An order under this section is secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 2(3) brought into force 30 September 2010 clause 2 Insurance (Prudential Supervision) Act Commencement Order 2010 Section 2(3) brought into force 1 February 2011 clause 2 Insurance (Prudential Supervision) Act Commencement Order (No 2) 2010 Section 2(6) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
1: Preliminary provisions
Purposes and principles
3: Purposes
1: The purposes of this Act are to—
a: promote the maintenance of a sound and efficient insurance sector; and
b: promote public confidence in the insurance sector.
2: Those purposes are achieved by—
a: establishing a system for licensing insurers; and
b: imposing prudential requirements on insurers; and
c: providing for the supervision by the Reserve Bank of New Zealand (the Bank
d: conferring certain powers on the Bank to act in respect of insurers in financial distress or other difficulties.
4: Principles to be taken into account under this Act
In achieving the purposes of this Act, the Bank must take into account the following principles that are relevant to the performance of functions or duties imposed, or the exercise of powers conferred, on the Bank by this Act:
a: the importance of insurance to members of the public in terms of their personal or business risk management:
b: the importance of maintaining the sustainability of the New Zealand insurance market:
c: the importance of dealing with an insurer in financial distress or other difficulties in a manner that aims to—
i: adequately protect the interests of its policyholders and the public interest; and
ii: ensure that any failure, or possible failure, of the insurer does not have the potential to significantly damage the financial system or the economy of New Zealand:
d: the importance of recognising—
i: that it is not a purpose of this Act to eliminate all risk of insurer failure; and
ii: that members of the public are responsible for their own decisions relating to insurance:
e: the desirability of providing to the public adequate information to enable members of the public to make those decisions:
f: the desirability of consistency in the treatment of similar institutions (while recognising that the New Zealand insurance market comprises a diversity of institutions):
g: the need to maintain competition within the insurance sector:
h: the need to avoid unnecessary compliance costs:
i: the desirability of sound governance of insurers:
j: the desirability of effective risk management by insurers. Overview
5: Overview
1: In this Act,—
a: this Part deals with preliminary matters, including purposes, principles, interpretation, the Bank's functions under this Act, and the application of this Act to the Crown:
b: Part 2
c: Part 3
d: Part 4
e: Part 5
2: This section is only a guide to the general scheme and effect of this Act. Interpretation
6: Interpretation
1: In this Act, unless the context otherwise requires,— accounting period actuary
a: a Fellow of the New Zealand Society of Actuaries Incorporated; or
b: the holder of an equivalent professional qualification approved by the Bank by notice to an insurer administrator Part 15A applicant appointed actuary
a: means a person holding an appointment by the insurer under section 76(1)
b: includes a person holding an appointment by the insurer under section 76(2) section 76(1)
c: includes a person appointed as an actuary by the Bank under section 149
d: includes a person appointed as an actuary by a statutory manager under section 192 approved rating agency section 62 associated person section 10(2) Bank Reserve Bank of New Zealand Act 2021 Bank's Internet site captive insurer
a: is a subsidiary of an entity that is not an insurer (the parent
b: only insures risks of the parent or of other subsidiaries of the parent (or both) carries on insurance business in New Zealand section 8 chief executive officer chief financial officer condition
a: in relation to a licensed insurer, means any condition of its licence; and
b: in relation to Lloyd's or a Lloyd's underwriter, means any condition of the licence issued to Lloyd's under section 203 205 contract of insurance section 7 current financial strength rating deed administrator section 239B deed of company arrangement section 239B derivative transaction
a: a transaction that is a rate swap transaction, swap option, basis swap, forward rate transaction, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, forward purchase or sale of a security, or commodity or other financial instrument or interest (including an agreement or option that relates to any of these transactions); or
b: a transaction that is similar to any transaction referred to in paragraph (a) that—
i: is currently, or in the future becomes, recurrently entered into in the financial markets; and
ii: is a forward, swap, future, option, or other derivative on 1 or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, economic indices or measures of economic risk or value, environmental or climatic variables, or other benchmarks against which payments or deliveries are to be made direction director
a: a person occupying the position of director by whatever name called:
b: in the case of an entity that does not have directors as such, any trustee, manager, or other person who acts in relation to that entity in the same or a similar fashion as a director would act were that entity a company incorporated in New Zealand under the Companies Act 1993 document section 4(1) failing to maintain a solvency margin section 21(2)﻿(b) or (c) financial statements section 6 Financial Reporting Act 2013 financial strength rating
a: in relation to an insurer other than a Lloyd's underwriter, means a rating that indicates the ability of the insurer to meet its liabilities under contracts of insurance as they fall due:
b: in relation to a Lloyd's underwriter, means a rating obtained by Lloyd's that applies to the Lloyd's market fit and proper standard section 36 generally accepted accounting practice section 8 governing body
a: in relation to a body corporate, the board of directors (or other persons or body exercising powers of management, however described) of the body corporate:
b: in relation to a partnership or other unincorporated body of persons, either—
i: the board of directors (or other persons or body exercising powers of management, however described) of the partnership or other unincorporated body of persons; or
ii: if there is no board or other persons or body as described in subparagraph (i), the partners of the partnership or members of the unincorporated body of persons Governor section 82 96 group financial statements section 7 Financial Reporting Act 2013 health insurance section 5(1) holding entity section 10(3) home jurisdiction
a: in relation to an overseas person that is a body corporate, the jurisdiction in which that body is incorporated:
b: in relation to a Lloyd's underwriter, the United Kingdom insurance intermediary
a: who, for reward, arranges contracts of insurance in New Zealand or elsewhere; and
b: who does so as the employee of or agent for 1 or more insurers or as the agent of the policyholder insurer investigator section 130(2)﻿(b) licence
a: means a licence issued under Part 2
b: includes a provisional licence licensed insurer
a: means a person that holds a licence; and
b: includes—
i: a person that holds a provisional licence; and
ii: a Lloyd's underwriter that is treated as being a licensed insurer under section 204 life insurer
a: means a licensed insurer that issues, or is liable under, life policies; and
b: includes a Lloyd's underwriter that issues, or is liable under, life policies and is treated as being a licensed insurer under section 204 life policy section 84 Lloyd's Lloyd's underwriter Minister New Zealand chief executive officer
a: the most senior officer of the insurer who is ordinarily resident in New Zealand; or
b: another person who may be nominated by the insurer and is agreed to in writing by the Bank New Zealand chief financial officer
a: the most senior officer of the insurer who is ordinarily resident in New Zealand (other than the New Zealand chief executive officer) who is responsible for the accounting and financial reporting obligations of the insurer; or
b: another person who may be nominated by the insurer and is agreed to in writing by the Bank New Zealand policyholder
a: who is ordinarily resident in New Zealand; or
b: that is incorporated or formed in New Zealand operating fraudulently or recklessly ordinarily resident in New Zealand overseas company overseas insurer
a: means an insurer that is an overseas person; and
b: includes a Lloyd's underwriter that is treated as being a licensed insurer under section 204 overseas person
a: a body corporate incorporated outside New Zealand; or
b: an unincorporated body that has its head office or principal place of business outside New Zealand overseas policyholder preference
a: relates to the recognition and priorities of claims of creditors or classes of creditors in the event of the insurer's insolvency; and
b: has the effect, directly or indirectly, of—
i: giving a material preference to policyholders in the insurer's home jurisdiction as compared to other policyholders; or
ii: otherwise being materially disadvantageous to New Zealand policyholders as compared to policyholders in the insurer's home jurisdiction overseas supervisor policyholder
a: the person who has entered into the contract of insurance with the insurer; or
b: if the rights of that person under the contract of insurance have been assigned, transferred by the operation of the contract, or transferred by operation of law, the person who has those rights premium provisional licence section 244 245 regulations reinsurance cedent related party
a: an associated person of the insurer:
b: a director or relevant officer of the insurer or any other person occupying a position that allows the person to exercise significant influence over the management or administration of the insurer:
c: a relative of a person referred to in paragraph (a) or (b):
d: a director of an associated person of the insurer:
e: a person who owns, or in any way has the power to control (whether directly or indirectly), or has the right to acquire, 10% or more of the voting rights in the insurer:
f: a person who has control (whether directly or indirectly) or significant influence over 25% or more of the composition of the governing body of the insurer relative section 2(1) relevant officer
a: in the case of an overseas insurer,—
i: New Zealand chief executive officer:
ii: New Zealand chief financial officer:
iii: the appointed actuary:
b: in any other case,—
i: chief executive officer:
ii: chief financial officer:
iii: the appointed actuary serious wrongdoing
a: is misleading or deceptive; or
b: involves the unlawful or corrupt use of the funds or resources of an entity; or
c: constitutes an offence that is punishable by imprisonment for a term of 2 years or more; or
d: is oppressive, improperly discriminatory, or grossly negligent, or that constitutes gross mismanagement; or
e: otherwise reflects adversely on a person’s competence, diligence, judgement, honesty, or integrity solvency standard section 55 statutory fund subpart 3 subsidiary
a: means a subsidiary within the meaning of sections 5 to 8
b: in section 81 section 5 voluntary administration Part 15A voting right section 2(1) Banking (Prudential Supervision) Act 1989 voting security section 2(1) Banking (Prudential Supervision) Act 1989
2: For the purposes of this Act, a reference to an insurer's insurance business includes business relating to the investment, administration, and management of the assets of the insurer and of its statutory funds (if any).
3: For the purposes of this Act, a licensed insurer or an associated person is operating fraudulently or recklessly
a: it contracts liabilities that the directors did not, at the time the liabilities were contracted, honestly believe on reasonable grounds the insurer or person would be able to pay when they fell due for payment as well as all its other liabilities (including contingent liabilities); or
b: it carries on any business, or operates, in a reckless manner; or
c: it carries on any business or operates with intent to defraud its policyholders, creditors, shareholders, or members or the policyholders, creditors, shareholders, or members of any other person, or for any other fraudulent purpose.
4: For the purposes of this Act, a person is ordinarily resident in New Zealand
a: is domiciled in New Zealand; or
b: is living in New Zealand and the place where that person usually lives is, and has been for the immediately preceding 12 months, in New Zealand, whether or not that person has on occasions been away from New Zealand during that period.
5: For the purposes of this Act, a reference to information or data that is false or misleading includes a reference to information or data that is false or misleading by reason of—
a: the form or context in which it is published or supplied; or
b: the omission of any other information that is material in the form and context in which it is published or supplied. Section 6(1) bank replaced 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 6(1) derivative transaction inserted 1 December 2014 section 150 Financial Markets (Repeals and Amendments) Act 2013 Section 6(1) financial statements replaced 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 6(1) generally accepted accounting practice inserted 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 6(1) Governor replaced 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 6(1) group financial statements replaced 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 6(1) subsidiary replaced 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 6(1) voting right amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 6(1) voting security amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021
7: Meaning of contract of insurance
1: For the purposes of this Act, unless the context otherwise requires, contract of insurance
a: means a contract involving the transference of risk and under which a person (the insurer) agrees, in return for a premium, to pay to or for the account of another person (the policyholder) a sum of money or its equivalent, whether by way of indemnity or otherwise, on the happening of 1 or more uncertain events; and
b: includes a contract of reinsurance.
2: In this section, uncertain event
a: with respect to which there is (from the perspective of the policyholder) an element of uncertainty as to when or whether it will take place; and
b: that is beyond the insurer's control.
3: However, a contract, to the extent that it provides for, or relates to, any of the following is not a contract of insurance for the purposes of this Act:
a: a derivative transaction
b: a guarantee under which a person agrees to answer to another person for the debt, default, or liability of a third person:
c: a repayment waiver (within the meaning of section 5
d: a product or service guarantee or warranty in relation to any goods or services that is given or made by the manufacturer or supplier:
e: any lump sum, annuity, pension, allowance, refund, or other payment arising from membership of a retirement scheme (within the meaning of section 6(1)
f: gambling (within the meaning of section 4(1)
g: a call-out service that involves providing assistance in respect of a motor vehicle (within the meaning of section 2(1)
h: any other transaction or matter of a class declared by regulations to be transactions or matters that are not by way of insurance. Section 7(3)﻿(a) amended 1 December 2014 section 150 Financial Markets (Repeals and Amendments) Act 2013 Section 7(3)﻿(e) amended 1 December 2014 section 150 Financial Markets (Repeals and Amendments) Act 2013
8: Meaning of carrying on insurance business in New Zealand
1: For the purposes of this Act, a person carries on insurance business in New Zealand
a: is—
i: a body corporate or an association of persons incorporated or formed in New Zealand; or
ii: an overseas company that is required to be registered or deemed to be registered under the Companies Act 1993
iii: an association of persons formed outside New Zealand that is carrying on business in New Zealand within the meaning of section 332
iv: ordinarily resident in New Zealand; and
b: acts, or has at any material time acted, as an insurer in New Zealand or elsewhere; and
c: is liable as an insurer under a contract of insurance to a New Zealand policyholder.
2: A person does not carry on insurance business in New Zealand for the purposes of this Act if the person is—
a: a Crown entity within the meaning of section 7(1) or the Earthquake Commission
b: an entity named in Part 1
c: the National Provident Fund Board (as continued in existence under section 12
d: a public entity (within the meaning of section 5(1)
e: an incorporated society or other association of persons that satisfies the criteria specified in subsection (3); or
f: the subject of a declaration under section 9
3: The criteria that an incorporated society or other association of persons must satisfy for the purposes of subsection (2)﻿(e) are that—
a: the primary purpose or purposes of the society or association relate to a particular profession, trade, or occupation; and
b: all of the members of the society or association consist of 1 or more of the following:
i: persons that belong to, or are associated with, the particular profession, trade, or occupation:
ii: bodies corporate or associations of persons that carry on the business of the particular profession, trade, or occupation:
iii: persons that act on behalf of any person referred to in subparagraph (i) or (ii); and
c: the society or association is not carried on for profit; and
d: insurance cover is provided by the society or association only—
i: to its members or relatives of its members; or
ii: in respect of the activities of its members when carrying out, or conducting, the work of the profession, trade, or occupation; and
e: the provision of insurance cover by the society or association is ancillary or incidental to the primary purpose or purposes of the society or association.
4: A person does not carry on insurance business in New Zealand for the purposes of this Act merely because the person—
a: is a specified bailee who has liability in respect of goods belonging to another person and in the possession, or under the control, of the specified bailee for the purpose of the carriage, storage, or sale of those goods; or
b: is an owner or operator of a specified place of accommodation who has liability in respect of goods belonging to another person that are—
i: in the possession, or under the control, of a guest at the specified place of accommodation; or
ii: deposited with the owner or operator of the specified place of accommodation for safe custody.
5: In subsection (4),— specified bailee specified place of accommodation
6: Subsection (1) is subject to subsections (2) to (4) and section 9 Section 8(2)﻿(a) amended 1 October 2019 section 33 Kāinga Ora–Homes and Communities Act 2019
9: Bank may declare that person is not carrying on insurance business in New Zealand in certain circumstances
1: The Bank may, by notice to a person, declare that the person is not carrying on insurance business in New Zealand for the purposes of this Act if the Bank is satisfied that—
a: the person is or will be an insurer only by reason of the fact that the person—
i: has entered or will enter into an isolated contract of insurance as an insurer; or
ii: occasionally enters into contracts of insurance as an insurer; and
b: entering into the contract or contracts referred to in paragraph (a) is incidental or ancillary to the business carried on by the person; and
c: requiring the person to obtain a licence would, in the circumstances, be unduly onerous or burdensome.
2: Subsection (1) is subject to section 232
10: Meaning of associated person and holding entity
1: For the purposes of this Act, unless the context otherwise requires, a person ( A B
a: B is A's holding entity or subsidiary; or
b: more than half of the voting securities of A, other than voting securities that carry no right to participate beyond a specified amount in a distribution of either profits or capital, are held by B and persons that are associated with B (whether directly or indirectly, but other than in a fiduciary capacity); or
c: more than half of the voting securities of each of A and B, other than voting securities that carry no right to participate beyond a specified amount in a distribution of either profits or capital, are held by members of the other (whether directly or indirectly, but other than in a fiduciary capacity); or
d: the businesses of A and B have been so carried on that the separate business of each person, or a substantial part of it, is not readily identifiable; or
e: there is another person with which both persons are associated.
2: Associated person
3: For the purposes of this Act, a person is another person's holding entity
11: Application of Act to friendly societies
This Act applies to a friendly society (as that term is defined in section 2 Section 11 replaced 1 April 2019 section 56(2) Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Act 2018 Bank's functions
12: Bank's functions under Act
The functions of the Bank under this Act are to—
a: issue licences under Parts 2 5
b: undertake prudential supervision of licensed insurers; and
c: take appropriate action in respect of licensed insurers and other persons that have failed, are failing, or are likely to fail to comply with this Act or the regulations or are otherwise in financial or other difficulties; and
d: carry out other functions and duties and exercise powers conferred on it by this Act and the regulations.
13: Bank must have regard to directions about Government policy objectives
Section 13 repealed 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Act binds the Crown
14: Act binds the Crown
This Act binds the Crown.
2: Licensing and prudential regulation of insurers
1: Licensing of insurers
Requirement to be licensed
15: Persons that carry on insurance business in New Zealand must be licensed
1: Every person who carries on insurance business in New Zealand must hold a licence.
2: A person who carries on insurance business in New Zealand without holding a licence commits an offence and is liable on
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
b: in the case of a body corporate, to a fine not exceeding $1,000,000. Section 15(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
16: Offence for person who is not licensed insurer to hold itself out to be licensed insurer
1: A person commits an offence if the person—
a: is not a licensed insurer; and
b: uses any name, title, trade mark, style, designation, or description that represents or implies that the person is a licensed insurer.
2: Every person who commits an offence under this section is liable on
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
b: in the case of a body corporate, to a fine not exceeding $1,000,000. Section 16(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Process for obtaining licence
17: Application for licence as insurer
1: Any body corporate that carries on insurance business in New Zealand, or proposes to carry on insurance business in New Zealand, may apply to the Bank to be licensed as a licensed insurer.
2: Applications must be—
a: made in the manner that is specified by the Bank; and
b: accompanied by payment of the prescribed fee for the application (if any).
3: Every applicant must provide to the Bank the information that is required by the Bank to assist it in determining the application.
4: An applicant commits an offence if it provides false or misleading information to the Bank for the purposes of an application and is liable, on Section 17(4) amended 1 July 2013 section 413 Criminal Procedure Act 2011
18: Applicant must provide fit and proper policy, fit and proper certificate, and risk management programme
1: An applicant must provide to the Bank with its application—
a: a copy of a fit and proper policy that complies with section 34
b: a certificate that—
i: states that, in the opinion of all of the directors of the applicant after due inquiry by them, all of the directors and relevant officers of the applicant are, in accordance with the policy, fit and proper persons to hold their respective positions; and
ii: is signed on behalf of all the directors of the applicant by at least 2 directors of the applicant (or, if the applicant has only 1 director, by that director); and
iii: contains, or is accompanied by, a certificate from each director or relevant officer that is signed by the director or relevant officer and states that, in his or her opinion, he or she is, in accordance with the policy, a fit and proper person to hold the relevant position; and
c: a copy of a risk management programme that complies with section 73
2: For the purposes of subsection (1)﻿(b), the person that the insurer intends to appoint as the appointed actuary must be treated as being a relevant officer.
19: Entitlement to licence
1: An applicant is entitled to be issued with a licence if the Bank is satisfied that—
a: the applicant holds a current financial strength rating that complies with section 60 section 60(2)
b: the applicant has the ability to carry on its business or proposed business in a prudent manner; and
c: the applicant has the ability to comply with subpart 2
d: in the case of an applicant who carries on, or proposes to carry on, business as a life insurer, the applicant has the ability to comply with subpart 3
e: the applicant has the ability to comply with the proposed conditions of licence (if any); and
f: the applicant holds and has the ability to maintain a minimum amount of capital that is specified in an applicable solvency standard; and
g: the applicant has complied with section 18(1)﻿(a) and (b)
h: the applicant has complied with section 18(1)﻿(c)
i: the applicant's incorporation and ownership structure, ownership, governance structure, and financial strength are appropriate, having regard to the size and nature of the applicant's business or proposed business, including—
i: the size and type of insurance business that is, or is proposed to be, carried out; and
ii: the size and type of risks that are, or are proposed to be, insured; and
j: in the case of an applicant that is an overseas person,—
i: the law and regulatory requirements of the applicant's home jurisdiction that apply to the applicant and relate to the matters specified in subsection (3) are appropriate, having regard to whether that law and those requirements are, in terms of achieving the purposes of this Act, at least as satisfactory as the law and regulatory requirements of New Zealand that relate to those matters and apply to insurers incorporated in New Zealand; and
ii: the nature and extent of prudential supervision that applies to the applicant and to insurers generally in the applicant's home jurisdiction are appropriate, having regard to whether the prudential supervision is, in terms of achieving the purposes of this Act, at least as satisfactory as the nature and extent of prudential supervision that applies to insurers incorporated in New Zealand; and
k: the applicant—
i: is registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008
ii: complies with section 13(a)
l: the applicant has the ability to comply with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009
m: the applicant complies with any other prescribed requirements.
2: For the purposes of subsection (1)﻿(c) and (d), the Bank must, in the case of an applicant that is an overseas person, have regard to any overseas policyholder preference.
3: For the purposes of subsection (1)﻿(j)﻿(i), the matters are—
a: the licensing, registration, or authorisation of insurers; and
b: the supervision of insurers; and
c: solvency and capital standards that apply to insurers; and
d: financial reporting, accounting, and auditing standards; and
e: corporate governance standards; and
f: matters concerning insurers that are insolvent or otherwise in serious financial difficulties; and
g: the disqualification of persons to be or to act as directors or relevant officers of an insurer.
4: The law and regulatory requirements referred to in subsection (1)﻿(j)﻿(i), and the nature and extent of the prudential supervision referred to in subsection (1)﻿(j)﻿(ii), must be treated as being appropriate for the purposes of those provisions if the applicant's home jurisdiction is a prescribed jurisdiction for the purposes of this subsection.
5: If an applicant is not required under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 section 13(a)
20: Carrying on business in prudent manner
1: Subsection (2) applies when the Bank is—
a: considering, for the purposes of section 19(1)﻿(b)
b: considering what conditions should be imposed under section 21
c: considering whether a licensed insurer is carrying on its business in a prudent manner.
2: The Bank must confine its consideration to the following matters:
a: financial and human resources in relation to the size and nature of the business or proposed business:
b: internal controls or proposed internal controls:
c: the size and type of insurance risk that is, or is proposed to be, carried by the applicant or insurer:
d: reinsurance arrangements that have been, or are proposed to be, entered into:
e: the extent to which the business or proposed business involves activities that are not insurance business and the nature of those activities (and, in particular, whether those activities may be prejudicial to the solvency of the applicant or insurer or its ability to comply with this Act or the regulations):
f: the nature and extent of transactions that the applicant or insurer has with, or in respect of, related parties (for example, loans to, or from, a related party or guarantees in respect of a related party's debts):
g: any other prescribed matters. Conditions of licence
21: Conditions of licence
1: A body corporate may be licensed as a licensed insurer unconditionally or subject to any conditions that the Bank may impose under subsection (2).
2: A licence may be subject to any of the following conditions:
a: conditions that relate to any of the matters referred to in section 20 section 20(2)﻿(g)
b: conditions that require a licensed insurer to maintain a solvency margin in accordance with an applicable solvency standard (including requiring the insurer to maintain a minimum amount of capital in accordance with the standard):
c: conditions that require a life insurer to maintain solvency margins in respect of the statutory funds of the insurer in accordance with an applicable solvency standard (including requiring the insurer to maintain a minimum amount of capital in accordance with the standard):
d: a condition that requires a specified amount or proportion of the licensed insurer's insurance business to relate to New Zealand policyholders (whether that amount or proportion is defined in terms of premium revenue, amount of insurance liability, a combination of premium revenue and amount of insurance liability, or in any other way):
e: in the case of a licensed insurer that has not yet commenced carrying on insurance business in New Zealand, either or both of the following:
i: a condition that specifies the time period within which the insurer must commence carrying on insurance business in New Zealand:
ii: a condition that specifies an amount of insurance business in New Zealand that the insurer must have within a specified period (whether that amount is defined in terms of premium revenue, amount of insurance liability, a combination of premium revenue and amount of insurance liability, or in any other way):
f: a condition that requires the licensed insurer or the directors of the insurer (or both) to certify that 1 or more of the following have been complied with (being certification that is given at the time or times and in the manner specified in the condition):
i: any conditions of the licence:
ii: any requirements of this Act or the regulations:
iii: any requirements of any other enactment imposed on the insurer as a licensed insurer (for example, financial reporting obligations):
g: a condition that requires a certificate given under paragraph (f) to be verified by the appointed actuary or another person specified in the condition (being verification that is given at the time or times and in the manner specified in the condition):
h: any other prescribed conditions or conditions that relate to prescribed matters.
3: Subsection (2)﻿(c) does not limit subsection (2)﻿(b).
4: A condition under subsection (2)﻿(b) or (c) may—
a: specify the amount of the solvency margin; or
b: set the level of the solvency margin by means of a ratio, percentage of another amount, or in any other way. Section 21(2)﻿(f) replaced 4 September 2013 section 4 Insurance (Prudential Supervision) Amendment Act 2013
22: Bank may modify conditions of licence
1: The Bank may, at any time after a licence is issued, by notice in writing to the licensed insurer,—
a: impose conditions of licence (whether or not the licence is already subject to conditions); or
b: vary, remove, add to, or substitute any conditions of licence.
2: Section 21(2) to (4)
3: The Bank must not exercise a power referred to in subsection (1) unless—
a: the Bank gives the licensed insurer not less than 7 days' notice in writing of the Bank's intention to do so; and
b: the notice contains, or is accompanied by, a statement of the Bank's reasons; and
c: the licensed insurer has a reasonable opportunity to make submissions to the Bank; and
d: the Bank has regard to those submissions.
23: Offence to fail to comply with conditions of licence
A licensed insurer commits an offence if it fails to comply with a condition of its licence and is liable, on Section 23 amended 1 July 2013 section 413 Criminal Procedure Act 2011
24: Licensed insurer must report likely failure to comply with solvency margin imposed under licence conditions
1: If a licensed insurer has reasonable grounds to believe that a failure to maintain a solvency margin is likely to occur at any time within the next 3 years, the insurer must report the likely failure to the Bank as soon as is reasonably practicable.
2: A licensed insurer that fails to comply with subsection (1) commits an offence and is liable, on Section 24(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Notification of decision
25: Bank must notify applicant of decision and give notice on
register
1: The Bank must, after it has made a decision on an application for a licence, give written notice of the decision to the applicant.
2: If the Bank refuses to issue a licence, the notice must contain, or be accompanied by, a statement of the Bank's reasons for the refusal.
3: The Bank must give notice of the issue of a licence on the register kept under section 54A Section 25 heading amended 4 September 2013 section 5(1) Insurance (Prudential Supervision) Amendment Act 2013 Section 25(3) replaced 4 September 2013 section 5(2) Insurance (Prudential Supervision) Amendment Act 2013 Bank must be notified before control is obtained and before corporate form is changed
26: Bank must be notified before control is obtained
1: Subsection (2) applies if, as a result of a proposed transaction, a person ( person A
a: would become a holding entity of a licensed insurer; or
b: would obtain control of a licensed insurer.
2: Person A must, before the proposed transaction takes effect, notify the Bank of the proposed transaction and include in its notification an explanation as to how this subsection applies to the person.
3: Subsection (2)—
a: applies regardless of whether person A is a party to the proposed transaction; but
b: does not apply to person A if—
i: person A does not know of the proposed transaction before it takes effect; or
ii: a specified person notifies the Bank of the proposed transaction under subsection (2).
4: In this section and sections 28 30
a: proposed transaction
b: person A has control
i: has the power, directly or indirectly, to exercise, or control the exercise of, 50% or more of the voting rights in the insurer; or
ii: has, together with 1 or more specified persons, the power, directly or indirectly, to exercise, or control the exercise of, 50% or more of the voting rights in the insurer:
c: specified person
i: a person who is acting or will act jointly or in concert with person A in respect of exercising, or controlling the exercise of, the voting rights in the licensed insurer referred to in subsection (1); or
ii: a person who acts, or is accustomed to act, in accordance with the wishes of person A.
27: Bank must be notified before corporate form is changed
If a licensed insurer intends or proposes to change its corporate form (for example, as a result of demutualisation), the insurer must notify the Bank of that matter before the change takes place.
28: Bank must consider whether it is still satisfied as to licensing matters
1: The Bank must, after being notified under section 26 27 section 19(1)﻿(a) to (m)
2: Each of the following persons must, within the time and in the manner specified by the Bank, provide to the Bank the information that is required by the Bank to assist it in acting under subsection (1):
a: in the case of section 26
b: in the case of section 27
3: The Bank must, within 20 working days after receiving under subsection (2) all of the information that is reasonably required by the Bank to assist it in acting under subsection (1), give written notice of its decision under that subsection together with a statement of the Bank's reasons to,—
a: in the case of section 26
b: in the case of section 27
29: Offence to fail to notify or provide information
A licensed insurer or other person that fails to comply with section 26 27 28(2) Section 29 amended 1 July 2013 section 413 Criminal Procedure Act 2011 Cancellation of licence
30: Cancellation of licence
1: The Bank may cancel a licence if the Bank is satisfied that—
a: 1 or more of the following applies:
i: the licensed insurer has asked the Bank, by written notice, to cancel its licence:
ii: the licensed insurer has ceased to carry on insurance business in New Zealand:
iii: the licensed insurer has breached a condition of the licence that requires it to commence carrying on insurance business in New Zealand:
iv: there has been a failure to comply with section 26 27 28(2) section 26(2)
v: the Bank has given a notice under section 28(3) section 19(1)﻿(a) to (m)
vi: the licensed insurer has been deregistered under section 18 section 22
vii: the licensed insurer is a company that has been removed from the New Zealand register (within the meaning of the Companies Act 1993
viii: the licensed insurer is an overseas company that has been removed from the overseas register (within the meaning of the Companies Act 1993):
ix: the licensed insurer has been liquidated, wound up, or dissolved or has otherwise ceased to exist; and
b: the licensed insurer has no liabilities under any contracts of insurance in respect of insurance business carried on by it in New Zealand.
2: The Bank must not, in the case of subsection (1)﻿(a)﻿(ii) to (vi)
a: the Bank sends notice of the Bank's intention to cancel the licence to the insurer; and
b: the notice contains, or is accompanied by, a statement of the Bank's reasons; and
c: the notice specifies the date by which an objection to the cancellation must be delivered to the Bank (which must be not less than 20 working days after the date of the notice); and
d: the Bank has regard to any objections that are received before the close of the date specified under paragraph (c).
3: The Bank must, as soon as practicable after cancelling a licence, give—
a: public notice of the cancellation; and
b: in the case of a cancellation under subsection (1)﻿(a)﻿(i) to (vi), written notice of the cancellation to the insurer.
4: In this section, public notice
a: in 1 or more daily newspapers circulating in each of the cities of Auckland, Hamilton, Wellington, Christchurch, and Dunedin; and
b: on the Bank's Internet site. Section 30(2) amended 4 September 2013 section 6 Insurance (Prudential Supervision) Amendment Act 2013
31: Assignment of liabilities to enable cancellation
1: If the Bank considers that it would, under section 30 section 32
2: The licensed insurer must—
a: effect the assignment of the liabilities within the period specified in the direction; and
b: comply with any conditions relating to the assignment that are specified by the Bank in the direction; and
c: comply with section 32(4)
3: Subsections (1) and (2) have effect despite section 44(1)
4: The licensed insurer may, in connection with an assignment under this section, assign any rights or benefits in connection with contracts of insurance in respect of the insurance business carried on in New Zealand by the insurer (subject to any conditions specified by the Bank in the direction).
5: A licensed insurer commits an offence if it fails to comply with this section and is liable, on Section 31(5) amended 1 July 2013 section 413 Criminal Procedure Act 2011
32: Bank's approval of assignment
1: A licensed insurer must not assign its liabilities under section 31
2: The Bank may only approve a proposed assignment of an insurer’s liabilities under section 31
a: the interests of the insurer’s policyholders; and
b: the interests of the policyholders of the licensed insurer or insurers to whom the liabilities are to be assigned; and
c: any other matter the Bank considers relevant.
3: The approval must be in writing and may be made subject to specified conditions.
4: If the Bank approves an assignment, the insurer must—
a: comply with the conditions of the approval; and
b: give reasonable notice (in writing) of the assignment to the insurer’s policyholders; and
c: give the Bank such written evidence of the assignment as the Bank reasonably requires.
33: Effect of assignment
If a licensed insurer (the first insurer second insurer section 32
a: contracts of insurance in respect of which liability is accepted by the first insurer (the transferring contracts
b: a policyholder under a transferring contract is taken to have the same rights against the first insurer as the policyholder would have against that insurer had the person’s contract of insurance been transferred by novation to the first insurer:
c: the rights of the first insurer against policyholders under transferring contracts are the same as they would be had the transferring contracts been transferred by novation to the first insurer from the second insurer. Fit and proper requirements
34: Licensed insurer must be subject to fit and proper policy for directors and relevant officers
1: Every licensed insurer must—
a: be subject to a written policy that governs the qualifications, requirements, and other criteria that a person must have or satisfy in order to be appointed, and to continue to hold a position, as a director or relevant officer of the insurer, being a policy for the purpose of ensuring that only fit and proper persons are appointed to, and continue to hold, those positions (a fit and proper policy
b: take all practicable steps to comply with that policy.
2: The fit and proper policy must clearly specify the qualifications, requirements, and other criteria for a particular position, including matters relating to a person's character, competence, and experience relative to the duties of the position.
3: The qualifications, requirements, and other criteria for a particular position that are specified in the fit and proper policy must, in the manner specified in an applicable fit and proper standard, take into account the fit and proper matters specified in the fit and proper standard.
4: The fit and proper policy must—
a: comply with the prescribed requirements; and
b: contain adequate provisions—
i: to encourage any person to disclose information to the insurer or the Bank that may be relevant to a fit and proper assessment; and
ii: for giving or obtaining any consents required for the collection and use of any information by the insurer to comply with the policy or section 37
5: A licensed insurer must obtain the Bank's approval before its fit and proper policy is amended in a material way.
6: A licensed insurer that fails to comply with this section commits an offence and is liable, on Section 34(6) amended 1 July 2013 section 413 Criminal Procedure Act 2011
35: Group fit and proper policy
1: If the licensed insurer is part of a group of insurers, the fit and proper policy that the insurer is required to be subject to may, at the option of the insurer, be a fit and proper policy that applies to the insurer and 1 or more other members of that group (a group policy
2: However, if the group policy does not comply with the requirements of section 34(1) to (4) section 34(1) to (4)
36: Fit and proper standards
1: The Bank may section 34(3)
a: specify matters that are relevant to the consideration of whether a person is a fit and proper person to be appointed to, and continue to hold, a position as a director or relevant officer; and
b: specify the manner in which those matters must be taken into account in respect of a fit and proper policy.
2: A fit and proper standard may be expressed to apply in relation to—
a: all licensed insurers or applicants; or
b: a specified class or classes of licensed insurers or applicants; or
c: 1 or more specified licensed insurers or applicants.
3: A fit and proper standard may—
a: have general or specific application:
b: differ according to differences in time or circumstance.
4: This section is subject to sections 233 to 235 Section 36(1) amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 36(4) amended 28 October 2021 section 3 Secondary Legislation Act 2021
37: Licensed insurer must provide fit and proper certificate for new directors or relevant officers or if Bank requires certificate
1: A licensed insurer must, no later than 20 working days after the appointment of a new director or relevant officer, provide to the Bank a certificate that complies with subsection (4) in respect of the new director or relevant officer.
2: In addition, if the Bank has given a notice in writing to a licensed insurer that requires the insurer to provide to the Bank a certificate that complies with subsection (4) in respect of a specified director or relevant officer, the insurer must, within the time specified in the notice, comply with the requirement.
3: Subsection (2) applies whether or not a certificate in respect of the director or officer has previously been provided under this section.
4: The certificate must—
a: specify the director's or relevant officer's full name, previous names (if any), and residential address; and
b: in the case of subsection (1), specify the date of the appointment and the director's or relevant officer's date of birth; and
c: state that, in the opinion of all directors of the licensed insurer after due inquiry by them, the director or relevant officer is, in accordance with its fit and proper policy, a fit and proper person to hold the relevant position; and
d: contain, or be accompanied by, a certificate signed by the director or relevant officer that states that, in his or her opinion, he or she is, in accordance with the licensed insurer's fit and proper policy, a fit and proper person to hold the relevant position; and
e: contain, or be accompanied by, a summary of information that is relevant to the consideration of whether the person satisfies the licensed insurer's fit and proper policy; and
f: be signed on behalf of all the directors of the licensed insurer by at least 2 directors of the insurer (or, if the insurer has only 1 director, by that director); and
g: be in the prescribed form (if any).
5: Every licensed insurer that is required to provide a certificate to the Bank under this section must provide to the Bank any further information that is required by the Bank to assist it in considering whether the director or relevant officer is a fit and proper person to hold the relevant position.
6: A licensed insurer commits an offence if the insurer fails to comply with this section and is liable, on Section 37(6) amended 1 July 2013 section 413 Criminal Procedure Act 2011
38: Bank may exempt overseas insurers from compliance with section 37(1)
1: The Bank may, by notice to an overseas insurer, exempt the insurer from compliance with section 37(1)
2: The Bank must, before granting an exemption, be satisfied that the law or regulatory requirements of the home jurisdiction of the insurer—
a: provide for the assessment by an overseas supervisor of whether the persons who are appointed as directors of the insurer are fit and proper persons to be appointed to that position; and
b: provide for the removal of a person from being a director of the insurer if the overseas supervisor considers that the person is not a fit and proper person to hold the relevant position.
3: The matters in subsection (2) must be treated as being satisfied in respect of an overseas insurer that is incorporated in a jurisdiction that is prescribed for the purposes of this subsection.
4: This section is subject to section 232
39: Power to remove directors and relevant officers
1: This section applies if the Bank, after having regard to the fit and proper matters specified in an applicable fit and proper standard, has reasonable grounds to believe that a director or relevant officer of a licensed insurer is not a fit and proper person to hold the relevant position.
2: If this section applies, the Bank may remove the director or relevant officer from the relevant position from a date specified by the Bank.
3: If the Bank acts under subsection (2), the Bank may give a direction that the director or relevant officer may not be reappointed as a director or relevant officer of the licensed insurer—
a: at any time; or
b: for a period specified by the Bank; or
c: until 1 or more things specified by the Bank occur (for example, the director or relevant officer receives a specified qualification).
4: This section may apply regardless of whether or not the director or relevant officer is, in accordance with the licensed insurer's fit and proper policy, a fit and proper person to hold his or her position.
5: This section does not apply in respect of a director of an overseas insurer.
6: This section has effect despite any contract, employment agreement, enactment, or rule of law, or the terms of the constitution of a licensed insurer.
40: How power to remove is exercised
1: The Bank must not exercise a power referred to in section 39
a: the Bank gives the licensed insurer and the director or relevant officer not less than 7 days' notice in writing of the Bank's intention to do so; and
b: the notice contains, or is accompanied by, a statement of the Bank's reasons; and
c: the licensed insurer and the director or relevant officer each have a reasonable opportunity to make submissions to the Bank; and
d: the Bank has regard to those submissions.
2: The Bank must exercise the powers conferred by section 39
a: the licensed insurer; and
b: the director or the relevant officer; and
c: in the case of a director, the Registrar of Companies.
3: A notice given under subsection (2)﻿(c) is sufficient compliance with section 159
4: A notice given under this section may be amended, revoked, or replaced in the same way as it may be given.
41: Former director or relevant officer must not accept reappointment in breach of direction
1: If a person has been removed from a particular position under section 39 section 39(3)
2: A person commits an offence if the person fails to comply with subsection (1) and is liable, on Section 41(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
42: Appeals from Bank's decision
1: A director or relevant officer or former director or relevant officer who is the subject of a decision of the Bank under section 39
2: An appeal is by way of rehearing.
3: A decision against which an appeal is lodged continues in force pending the determination of the appeal unless the High Court orders otherwise.
43: Appeal to Court of Appeal on question of law
1: Any party to an appeal under section 42 section 56
2: In determining whether to grant leave to appeal, the Court of Appeal must have regard to whether the question of law involved in the appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for its decision.
3: The Court of Appeal, in granting leave, may impose the conditions that it thinks fit, whether as to costs or otherwise.
4: The decision of the Court of Appeal on any application for leave to appeal, or on an appeal under this section, is final. Section 43(1) amended 1 March 2017 section 183(b) Senior Courts Act 2016 Transfers and amalgamations
44: Transfers and amalgamations must be approved
1: A licensed insurer must obtain the written approval of the Bank before—
a: giving effect to a transaction that involves,—
i: in the case of an overseas insurer, the transfer of all or part of the insurer's New Zealand insurance business to another person; or
ii: in the case of any other insurer, the transfer of all or part of the insurer's insurance business to another person; or
b: the insurer amalgamates with another person (whether it occurs under Part 13
2: For the purposes of sections 45 to 53 amalgamated entity transferee
3: A licensed insurer commits an offence if—
a: the insurer fails to comply with subsection (1); or
b: in the case of the Bank refusing to give its approval under subsection (1), the insurer takes any further steps after the refusal under the Companies Act 1993
4: Every licensed insurer that commits an offence under subsection (3) is liable, on
5: This section does not apply in respect of a transfer or amalgamation under section 31 sections 164 to 167 subpart 4 section 207(5) Section 44(4) amended 1 July 2013 section 413 Criminal Procedure Act 2011
45: Request for approval
1: A request for the Bank to give its approval under section 44
a: made in the manner that is specified by the Bank; and
b: accompanied by payment of the prescribed fee for the request (if any).
2: A joint request may be made by 2 or more licensed insurers that are parties to the proposed transfer or amalgamation.
3: A licensed insurer that makes a request and every other party to the proposed transfer or amalgamation must provide to the Bank the information that is required by the Bank to assist it in determining whether to give its approval.
46: Actuarial or other report on transfer or amalgamation proposal
1: The Bank may arrange for an independent actuary or any other suitably qualified person to make a written report on a proposed transfer or amalgamation.
2: A licensed insurer that makes a request and every other party to the proposed transfer or amalgamation must provide to the actuary or other person referred to in subsection (1) the information that is required by the actuary or person to assist him or her in preparing the report.
47: Costs of report
1: A licensed insurer that makes a request under section 45 section 46
2: An amount payable under subsection (1) is recoverable as a debt due to the Bank in any court of competent jurisdiction.
48: Bank must have regard to certain matters in considering request
In considering a request made under section 45
a: the ability of the transferee, or the amalgamated entity, to comply with subpart 2 subpart 3
b: the interests of the policyholders of the insurers that are parties to the proposed transfer or amalgamation:
c: any other matter the Bank considers relevant.
49: Bank's decision on approval
1: The Bank may, after considering a request made under section 45
a: give its approval unconditionally or subject to any conditions that the Bank may impose under subsection (3); or
b: refuse to give its approval.
2: The Bank must give the notice under subsection (1) within 20 working days after receiving both of the following:
a: all of the information under section 45(3)
b: all reports that the Bank has arranged to receive under section 46
3: The approval may be subject to any of the following conditions:
a: conditions that relate to any of the matters referred to in section 20 section 20(2)﻿(g)
b: a condition that requires a specified amount or proportion of the transferee's or amalgamated entity's insurance business to relate to New Zealand policyholders (whether that amount or proportion is defined in terms of premium revenue, amount of insurance liability, a combination of premium revenue and amount of insurance liability, or in any other way):
c: a condition that requires a licensed insurer or the directors of a licensed insurer (or both) to certify that any conditions have been complied with (being certification that is given at the time or times and in the manner specified in the condition):
d: any other prescribed conditions or conditions that relate to prescribed matters.
4: If the Bank refuses to give its approval, it must give a notice to the licensed insurer or insurers that contains a statement of its reasons.
50: Offence to fail to comply with conditions of approval
A licensed insurer commits an offence if it fails to comply with a condition of the approval imposed under section 49 Section 50 amended 1 July 2013 section 413 Criminal Procedure Act 2011
51: Requirement for approval is in addition to requirements under other enactments
Sections 44 to 50 section 44 Part 13
52: Transfer or amalgamation not invalidated
Nothing in sections 44 to 51
53: Effect of assignment for purposes of approved transfer
1: If the Bank approves a transfer under section 44 first insurer second insurer
a: contracts of insurance in respect of which liability is accepted by the first insurer (the transferring contracts
b: a policyholder under a transferring contract is taken to have the same rights against the first insurer as the policyholder would have against that insurer had the person’s contract of insurance been transferred by novation to the first insurer:
c: the rights of the first insurer against policyholders under transferring contracts are the same as they would be had the transferring contracts been transferred by novation to the first insurer from the second insurer.
2: An agreement between the first insurer and the second insurer may, with the Bank's approval, allocate liabilities in respect of the transferring contracts (and that agreement is binding on the first insurer, the second insurer, and the policyholders under those contracts).
3: Subsection (1) is subject to subsection (2). Publication of policies Heading repealed 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021
54: Publication of policies
Section 54 repealed 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Register Heading inserted 4 September 2013 section 7 Insurance (Prudential Supervision) Amendment Act 2013
54A: Register
1: The Bank must keep a public register of licensed insurers.
2: The Bank must determine the form of the register and may amend the form as it considers necessary.
3: The register must include—
a: the name of each licensed insurer; and
b: the current financial strength rating of each licensed insurer (unless the insurer is not required to have such a rating); and
c: any other prescribed information.
4: The Bank must take all reasonable steps to ensure that the information contained in the public register is available to members of the public at all reasonable times. 1989 No 157 s 69 Section 54A inserted 4 September 2013 section 7 Insurance (Prudential Supervision) Amendment Act 2013
2: Prudential regulation of insurers
Solvency standards
55: Bank may issue solvency standards
1: The Bank may
2: A solvency standard may be expressed to apply in relation to—
a: all licensed insurers or applicants; or
b: a specified class or classes of licensed insurers or applicants; or
c: 1 or more specified licensed insurers or applicants.
3: A solvency standard may—
a: have general or specific application:
b: differ according to differences in time or circumstance.
4: The Bank must, before issuing a solvency standard, have regard to relevant overseas standards for the purpose of ensuring that the solvency standard to be issued by the Bank (the proposed standard
5: In subsection (4), relevant overseas standards
a: relate to matters that are the same as, or similar to, those that are covered by the proposed solvency standard; and
b: apply to insurers in the home jurisdictions of the overseas insurers to which the proposed solvency standard will apply.
6: This section is subject to sections 233 to 235 Section 55(1) amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 55(6) amended 28 October 2021 section 3 Secondary Legislation Act 2021
56: Matters that may be contained in solvency standards
A solvency standard may prescribe 1 or more of the following matters:
a: for the purposes of sections 19(1)﻿(f) 21(2)﻿(b) and (c)
i: the minimum amount of capital that an insurer must hold and maintain:
ii: the methods for determining or calculating the amount of capital that an insurer must hold and maintain (whether by reference to a specified formula, framework, or amount, a combination of specified formulae, frameworks, or amounts, or otherwise):
b: the methods for determining or calculating a solvency margin for the purposes of a condition of a licence (whether by reference to a specified formula, framework, or amount, a combination of specified formulae, frameworks, or amounts, or otherwise):
c: the methods for determining whether, and the extent to which, a solvency margin is being maintained:
d: requirements relating to reports about the financial condition of a licensed insurer and other reports relating to the solvency of the licensed insurer (including requirements relating to the information that must be contained in the reports, who must prepare the reports, how often the reports must be prepared, other matters concerning the preparation of reports, to whom the reports must be provided, and when the reports must be provided):
e: for the purposes of any of paragraphs (a) to (d),—
i: the methods for estimating or valuing the assets or liabilities (or both) of an insurer:
ii: the assets of an insurer that must be disregarded (in whole or in part) for the purposes of estimating or valuing the assets of an insurer:
f: for the purposes of any of paragraphs (a) to (d), any other matters relating to the assessment, or disclosure, of—
i: whether, and the extent to which, the value of an insurer's assets exceeds the value of its liabilities (including contingent liabilities); or
ii: whether an insurer is able to pay its liabilities as they become due in the normal course of business; or
iii: other matters relating to the financial condition or solvency of an insurer:
g: requirements relating to the disclosure of information relating to the financial condition or solvency of a licensed insurer to 1 or more of the following (including prescribing to whom and when disclosure must be made and the manner of disclosure):
i: the Bank:
ii: the insurer's policyholders or any class of those policyholders:
iii: the public or any class of the public:
h: matters relating to the manner in which a review of actuarial information under section 77
57: Offence to fail to comply with reporting and disclosure requirements
A licensed insurer commits an offence if it fails to comply with any of the requirements of a solvency standard under section 56(d) or (g) Section 57 amended 1 July 2013 section 413 Criminal Procedure Act 2011
58: Incorporation by reference
Section 58 repealed 4 September 2013 section 8 Insurance (Prudential Supervision) Amendment Act 2013
59: Bank may exempt overseas insurers from compliance
1: The Bank may, by notice to an overseas insurer, exempt the insurer from compliance with a solvency standard or a part of a solvency standard.
2: The Bank must, before granting an exemption, be satisfied that—
a: the overseas insurer is required, under the law or regulatory requirements of the home jurisdiction of the insurer, to comply with standards or requirements that relate to the same or similar matters that are covered by the solvency standard or the part of a solvency standard to which the exemption relates (the overseas standards or requirements
b: the overseas standards or requirements—
i: cover the New Zealand business of the overseas insurer; and
ii: are, in terms of achieving the purposes of this Act, at least as satisfactory as the solvency standard or the part of a solvency standard to which the exemption relates; and
c: the nature and extent of prudential supervision that applies to the overseas insurer in respect of the overseas standards or requirements is, in terms of achieving the purposes of this Act, at least as satisfactory as the nature and extent of prudential supervision that applies to insurers incorporated in New Zealand in respect of the solvency standard or the part of a solvency standard to which the exemption relates.
3: This section is subject to section 232 Financial strength ratings
60: Licensed insurer must have current financial strength rating
1: A licensed insurer must have a current financial strength rating that is given by an approved rating agency.
2: Subsection (1) does not apply to—
a: a licensed insurer that is included in a class of insurers that is the subject of an exemption under section 238(1)﻿(a)﻿(ii)
b: a licensed insurer if the only kind of insurance business carried on by the insurer in New Zealand is reinsurance business; or
c: a captive insurer; or
d: an insurer that is exempted under subsection (2A).
2A: The Bank may, by notice to a licensed insurer, exempt the insurer from compliance with subsection (1) if the Bank is satisfied that the insurer has ceased to enter into new contracts of insurance as an insurer.
2B: Subsection (2A) is subject to section 232
3: Sections 63 to 71
a: a reinsurer in respect of its reinsurance business; or
b: a captive insurer.
4: A licensed insurer commits an offence if it fails to comply with this section and is liable, on Section 60(2)﻿(c) replaced 4 September 2013 section 9(1) Insurance (Prudential Supervision) Amendment Act 2013 Section 60(2)﻿(d) inserted 4 September 2013 section 9(1) Insurance (Prudential Supervision) Amendment Act 2013 Section 60(2A) inserted 4 September 2013 section 9(2) Insurance (Prudential Supervision) Amendment Act 2013 Section 60(2B) inserted 4 September 2013 section 9(2) Insurance (Prudential Supervision) Amendment Act 2013 Section 60(4) amended 1 July 2013 section 413 Criminal Procedure Act 2011
61: Financial strength rating must refer to overseas policyholder preference
1: If an overseas policyholder preference may apply in respect of a licensed insurer that is an overseas insurer, the financial strength rating of the insurer must, in the prescribed circumstances and in the prescribed manner, contain, or be accompanied by, a reference to the overseas policyholder preference when the financial strength rating is disclosed under any of sections 64 67 to 69
2: If subsection (1) is not complied with, the licensed insurer must be treated as having failed to comply with section 64 67 68 69
62: Bank may approve rating agencies
1: The Bank may approve a person as a rating agency for the purposes of this Act.
2: In deciding whether to approve a person as a rating agency, the Bank must have regard to the following:
a: the independence of the rating agency:
b: the adequacy of resources available to the rating agency:
c: the credibility and objectivity of the rating agency's methodology:
d: the consistency and comparability of the rating agency's ratings when assessed against ratings industry practice:
e: the adequacy of the rating agency's disclosure of information, including information about its processes, experience, and ownership:
f: relevant international standards, codes, and recommended practices relating to the ratings industry.
3: The Bank may, at any time, review the approval of a person as a rating agency, and in conducting the review the Bank must have regard to the matters in subsection (2).
4: If, after conducting the review, the Bank considers that the person should no longer be an approved rating agency, it may revoke the approval.
5: A financial strength rating given to an insurer by an agency at a time when the agency was an approved rating agency does not cease to be a rating from an approved rating agency for the purposes of this Act by reason of the fact that the approval of that agency has expired or has been revoked.
6: The Bank must publish and keep up to date a list of approved rating agencies on the Bank's Internet site at all reasonable times.
63: Licensed insurer must notify Bank of change in rating or credit watch warning
1: A licensed insurer must, within 20 working days after receiving notice in writing that its financial strength rating has changed, deliver to the Bank a certificate by the approved rating agency of the new rating that also states the date on which it was given.
2: A licensed insurer must, within 20 working days after receiving notice in writing that a credit watch warning has been given by an approved rating agency in respect of the insurer's financial strength rating, deliver to the Bank a certificate by the approved rating agency of the credit watch warning that also states the date on which it was given and the reasons for it.
3: In this section, credit watch warning
64: Disclosure of current rating to policyholder
1: A licensed insurer that is required to comply with section 60(1)
a: the insurer's current financial strength rating; and
b: the name of the agency by which the rating was given; and
c: the rating scale of which the rating referred to in paragraph (a) forms part.
2: If an insurance intermediary, in arranging a contract of insurance or the renewal of a contract of insurance, discloses to the policyholder in writing and before the contract is entered into or renewed the matters referred to in subsection (1) in relation to the proposed insurer, the insurer must be treated as having complied with that subsection.
3: If it is not reasonably practicable for a licensed insurer or insurance intermediary, as the case may be, to disclose the matters referred to in subsection (1) in writing and before the contract is entered into or renewed, that subsection must be treated as having been complied with if—
a: those matters (other than the rating scale) are disclosed to the policyholder orally before the contract is entered into or renewed; and
b: those matters are disclosed to the policyholder in writing as soon as it becomes practicable to do so.
4: For the purposes of this section, a matter is not to be taken as having been disclosed unless it is disclosed clearly and prominently.
4A: If a contract of insurance is renewed, the licensed insurer is not required to comply with subsection (1) if—
a: the contract is of a kind that is renewable more frequently than annually; and
b: the information referred to in that subsection was disclosed in writing to the policyholder less than 12 months before the date of the renewal; and
c: that information has not changed since the last disclosure was made to the policyholder under this section.
5: A licensed insurer commits an offence if it fails to comply with this section and is liable, on Section 64(4A) inserted 4 September 2013 section 10 Insurance (Prudential Supervision) Amendment Act 2013 Section 64(5) amended 1 July 2013 section 413 Criminal Procedure Act 2011
65: Disclosure by insurers not required to be rated
1: A licensed insurer that does not have a current financial strength rating as a result of section 60(2)﻿(a)
a: that the insurer is not required to have a current financial strength rating; and
b: the reason why it is not required to have a current financial strength rating.
2: If an insurance intermediary, in arranging a contract of insurance or the renewal of a contract of insurance, discloses to the policyholder in writing and before the contract is entered into or renewed the matters referred to in subsection (1) in relation to the proposed insurer, the insurer must be treated as having complied with that subsection.
3: If it is not reasonably practicable for a licensed insurer or insurance intermediary, as the case may be, to disclose the matters referred to in subsection (1) in writing and before the contract is entered into or renewed, that subsection must be treated as having been complied with if those matters are disclosed to the policyholder—
a: orally before the contract is entered into or renewed; and
b: in writing as soon as it becomes practicable to do so.
4: For the purposes of this section, a matter is not to be taken as having been disclosed unless it is disclosed clearly and prominently.
5: A licensed insurer commits an offence if it fails to comply with this section and is liable, on Section 65(5) amended 1 July 2013 section 413 Criminal Procedure Act 2011
66: Policyholder may cancel if disclosure is not made
1: If a contract of insurance is entered into or renewed, as the case may be, and section 64 65
2: If a contract of insurance is cancelled under subsection (1), the New Zealand policyholder ceases to be liable for the payment of any premiums relating to the period commencing on the date on which the contract is cancelled and ending on the date on which the contract would have terminated, and any premiums paid by the policyholder to the insurer or any insurance intermediary that relate to that period must be repaid to the policyholder by the insurer.
67: Disclosure of rating on licensed insurer's Internet site
1: If an Internet site that is maintained by, or on behalf of, a specified licensed insurer contains information or advertising about the insurer's insurance products, the insurer must ensure that the Internet site—
a: states clearly and prominently—
i: the insurer's current financial strength rating; and
ii: the name of the agency by which the rating was given; and
iii: the rating scale of which the rating referred to in subparagraph (i) forms part; or
b: contains a prominent link to another Internet site that clearly and prominently states the matters specified in paragraph (a).
2: In this section, a specified licensed insurer section 60(1)
68: Other advertising of ratings
1: No advertisement that refers to the current financial strength rating, or to any part of the rating, of a licensed insurer may be distributed unless the advertisement also states clearly and prominently—
a: the rating; and
b: the name of the agency by which the rating was given; and
c: that any scale of which the rating forms part is available for inspection at every office in New Zealand of the insurer.
2: For the purposes of this section and section 70
3: However, this section does not apply in relation to advertising on an Internet site that is maintained by, or on behalf of, a licensed insurer (but section 67
69: Licensed insurer must give public notice of downgrade or notice to policyholders
1: If, for the purposes of this Act, a licensed insurer is given a financial strength rating by an approved rating agency that is lower than the immediately preceding financial strength rating given to the insurer, the insurer must either,—
a: within 10 working days after the lower rating is given, give public notice of the fact that the rating has been downgraded; or
b: within 60 working days after the lower rating is given, give written notice of the fact that the rating has been downgraded to every New Zealand policyholder under a contract of insurance with the insurer.
2: A notice given by a licensed insurer under subsection (1) may include any additional matter that the insurer considers is relevant to a proper understanding of the reasons for the downgrading of the rating.
3: In this section, public notice
a: in 1 or more daily newspapers circulating in each of the cities of Auckland, Hamilton, Wellington, Christchurch, and Dunedin; and
b: on an Internet site maintained by, or on behalf of, the licensed insurer.
70: Licensed insurer must not disclose or advertise ratings from non-approved agencies
1: A licensed insurer must not—
a: disclose to a New Zealand policyholder a rating from a non-approved agency; or
b: distribute an advertisement relating to any of the insurer's insurance products that refers to a rating from a non-approved agency.
2: Subsection (1)﻿(a) does not apply in respect of a disclosure to any policyholder that is a related party or an employee of the insurer.
3: In this section, rating from a non-approved agency
71: Offence to fail to comply with disclosure obligations
A licensed insurer commits an offence if it fails to comply with any of sections 63 67 to 70 Section 71 amended 1 July 2013 section 413 Criminal Procedure Act 2011 Disclosure of overseas policyholder preference
72: Overseas insurer must disclose overseas policyholder preference
1: If an overseas policyholder preference may apply in respect of a licensed insurer that is an overseas insurer, the insurer must disclose the nature and the extent of the overseas policyholder preference in the circumstances and in the manner that is prescribed.
2: An overseas insurer commits an offence if it fails to comply with this section and is liable, on Section 72(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Risk management
73: Licensed insurer must be subject to and comply with risk management programme
1: A licensed insurer must be subject to a risk management programme and take all practicable steps to comply with that programme.
2: The risk management programme must—
a: be in writing; and
b: set out the procedures that the licensed insurer will use for the effective identification and management of the following risks:
i: insurance risk:
ii: credit risk:
iii: liquidity risk:
iv: market risk:
v: operational risk:
vi: a prescribed type of risk (being a type of risk that is specified in the regulations to apply to the insurer or to a specified class of insurers that includes the insurer); and
c: set out appropriate documentation and record-keeping requirements; and
d: describe the steps that the licensed insurer will take to ensure that the programme remains current, which must include procedures for regular review of the programme to systematically identify and address deficiencies in the effectiveness of the programme; and
e: be appropriate to the operations of the licensed insurer, having regard to the factors relevant to the risks referred to in paragraph (b) (for example, the size of the licensed insurer, its corporate structure (including its relationship with associated persons), its funding structure, the market sector in which it operates, and its business strategy).
3: The Bank may issue, in the manner that the Bank
4: A licensed insurer must obtain the Bank's approval before its risk management programme is amended in a material way.
5: However, if it is not reasonably practicable for a licensed insurer to obtain the Bank's approval before its risk management programme is amended in a material way (for example, because the amendment needs to be made urgently),—
a: the insurer may amend the risk management programme before obtaining the approval; but
b: the amendment ceases to have effect if—
i: the insurer fails to notify the Bank of the amendment within 5 working days after the amendment is made; or
ii: the Bank does not give its approval to the amendment within 5 working days after being notified of the amendment. Section 73(3) amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021
74: Group risk management programme
1: If a licensed insurer is part of a group of insurers, the risk management programme that the insurer is required to be subject to may, at the option of the insurer, be a risk management programme that applies to the insurer and 1 or more other members of that group (a group programme
2: However, if the group programme does not comply with the requirements of section 73(2)
75: Offence to fail to comply with risk management requirements
A licensed insurer commits an offence if it fails to comply with section 73 Section 75 amended 1 July 2013 section 413 Criminal Procedure Act 2011 Appointment of actuary and actuarial review
76: Requirement for licensed insurers to have appointed actuary
1: A licensed insurer must have an actuary appointed by the insurer.
2: A licensed insurer may, at any time, appoint an alternate actuary to act as the insurer's appointed actuary if the person appointed under subsection (1) is unable to act (whether by reason of absence or illness or otherwise).
3: The licensed insurer must, within 6 weeks after a person stops being the appointed actuary under subsection (1) or within any longer period allowed by the Bank, appoint another person to be an appointed actuary (unless the person is replaced under section 149 192
4: A licensed insurer must not appoint a person under subsection (1) or (2) unless the person is an actuary and is, in accordance with the insurer's fit and proper policy, a fit and proper person to hold the position.
5: A person appointed under subsection (1) or (2) may be an employee of the licensed insurer or engaged under a contract for services.
77: Review of actuarial information in, or used in the preparation of, financial statements
1: A licensed insurer must ensure that the actuarial information contained in, or used in the preparation of, the financial statements or group financial statements of the insurer referred to in section 81(1)
2: The licensed insurer must take all practicable steps to ensure that the review is completed, and the report referred to in section 78 section 81
3: The review must be carried out in accordance with an applicable solvency standard.
4: For the purposes of this section and section 78 actuarial information
a: information relating to an insurer's calculations of premiums, claims, reserves, dividends, insurance and annuity rates, and technical provisions; and
b: information relating to assessments of the probability of uncertain future events occurring and the financial implications for the insurer if those events do occur; and
c: information specified in an applicable solvency standard as being actuarial information for the purposes of this section.
5: A licensed insurer commits an offence if it fails to comply with this section and is liable, on Section 77(1) replaced 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 77(2) replaced 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 77(5) amended 1 July 2013 section 413 Criminal Procedure Act 2011
78: Appointed actuary's report
The appointed actuary's report in respect of a review under section 77
a: the actuary's name; and
b: the work done by the actuary; and
c: the scope and limitations of the review; and
d: the existence of any relationship (other than that of actuary) that the actuary has with, or any interests that the actuary has in, the licensed insurer or any of its subsidiaries; and
e: whether the actuary has obtained all information and explanations that he or she has required; and
f: whether, in the actuary's opinion and from an actuarial perspective,—
i: the actuarial information contained in the financial statements and any group financial statements has been appropriately included in those statements (and if not, the respects in which it has been inappropriately included); and
ii: the actuarial information used in the preparation of the financial statements and any group financial statements has been used appropriately (and if not, the respects in which it has been used inappropriately); and
g: whether, in the actuary's opinion and from an actuarial perspective, the licensed insurer is maintaining the solvency margin that applies under a condition imposed under section 21(2)﻿(b)
h: in the case of a life insurer, whether, in the actuary's opinion and from an actuarial perspective, the life insurer is maintaining the solvency margins that apply in respect of its statutory funds under a condition imposed under section 21(2)﻿(c)
79: Provisions relating to auditor's report
A licensed insurer must ensure that the auditor's report that is prepared in respect of the insurer's financial statements or group financial statements is accompanied by the appointed actuary's report prepared under section 78
a: the auditor's report is delivered for registration or lodgement under any enactment; and
b: the auditor's report is included in the insurer's annual report (in the case of an insurer that includes the auditor's report in its annual report). Section 79 replaced 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013
80: Access to information
1: A licensed insurer must ensure that any specified actuary has reasonable access to the accounting records and other documents of the insurer.
2: A licensed insurer commits an offence if it fails to comply with subsection (1) and is liable, on
3: A specified actuary is entitled to require from a director or an employee of the insurer such information and explanations as he or she thinks necessary for the performance of his or her duties as an actuary.
4: A director or an employee commits an offence if he or she fails to comply with subsection (3) and is liable, on
5: It is a defence to a director or an employee charged with an offence under subsection (4) if he or she proves that—
a: he or she did not have the information required in his or her possession or under his or her control; or
b: by reason of the position occupied by him or her or the duties assigned to him or her, he or she was unable to give the information or explanations required.
6: In this section, specified actuary
a: the appointed actuary; or
b: an actuary that is appointed by or under any of the provisions of this Act to perform or exercise any function, duty, or power in respect of the insurer. Section 80(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 80(4) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Supply of financial statements
81: Financial statements
and interim financial information
1: A licensed insurer must ensure that, on or before the date on which the financial statements or group financial statements of the insurer are required to be registered or lodged under any Act
a: copies of those statements together with a copy of the auditor's report on those statements are given to the Bank; and
b: a copy of the appointed actuary's report prepared under section 78
2: A licensed insurer must, within 4 months after the end of the first half of each accounting period of the insurer,—
a: prepare interim financial information for that half-period that complies with subsection (3); and
b: ensure that copies of that information together with a copy of the auditor's report on the information (if any) are given—
i: to the Bank; and
ii: for registration to the Registrar of Companies
3: The interim financial information must—
a: comply with—
i: generally accepted accounting practice; or
ii: requirements specified by the Bank in a written notice given to the insurer (for example, regulatory requirements that apply in the insurer's home jurisdiction); and
b: be audited if required by the regulations.
4: If subsection (3)﻿(a)﻿(i) applies, the interim financial information must be interim financial statements prepared in respect of—
a: the insurer if the insurer, at the end of the half-period, has no subsidiaries; or
b: a group comprising the insurer and its subsidiaries in any other case.
4A:
5: This section is subject to any exemption under section 238(1)﻿(a)﻿(iii)
6: A licensed insurer commits an offence if it fails to comply with this section and is liable, on Section 81 heading amended 4 September 2013 section 11(1) Insurance (Prudential Supervision) Amendment Act 2013 Section 81(1) amended 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 81(2) replaced 4 September 2013 section 11(2) Insurance (Prudential Supervision) Amendment Act 2013 Section 81(2)﻿(b)﻿(ii) amended 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 81(3) replaced 4 September 2013 section 11(2) Insurance (Prudential Supervision) Amendment Act 2013 Section 81(4) replaced 4 September 2013 section 11(2) Insurance (Prudential Supervision) Amendment Act 2013 Section 81(4A) repealed 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 81(6) amended 1 July 2013 section 413 Criminal Procedure Act 2011
3: Statutory funds of life insurers
General requirements
82: Requirement that life insurer have statutory funds
1: A life insurer must at all times have at least 1 statutory fund in respect of its life insurance business (but may have more statutory funds if it chooses to do so).
2: A statutory fund is a fund that—
a: is established in the records of a life insurer; and
b: relates solely to the life insurance business of the life insurer or a particular part of that business.
3: This subpart does not apply to a life insurer that is included in a class of insurers that is the subject of an exemption under section 238(1)﻿(a)﻿(iv)
83: Overview of requirements regarding statutory funds
1: The principal requirements of this subpart in relation to statutory funds may be summarised as follows:
a: all amounts received by a life insurer in respect of the business of a fund must be credited to the fund:
b: all assets and investments related to the business of a fund must be included in the fund:
c: all liabilities (including policy liabilities) of the life insurer arising out of the conduct of the business of a fund must be treated as liabilities of the fund:
d: the assets of a fund are only available for expenditure related to the conduct of the business of the fund:
e: funds may not be restructured or terminated without the approval of the Bank:
f: profits and losses of a fund may only be dealt with in accordance with sections 112 to 115
2: This section is only a guide to the general scheme and effect of this subpart.
84: Meaning of life policy
1: For the purposes of this Act, each of the following constitutes a life policy
a: a contract of insurance that provides for the payment of money on the death of a person or on the happening of a contingency dependent on the termination or continuance of human life:
b: a contract of insurance that is subject to payment of premiums for a term dependent on the termination or continuance of human life:
c: a contract of insurance that provides for the payment of an annuity for a term dependent on the continuance of human life:
d: a contract of insurance that is, by its terms, to be of more than 1 year's duration and under which a benefit (other than a health insurance benefit) is payable in the event of—
i: the death, by accident or by some other cause stated in the contract, of the person whose life is insured (the insured person
ii: injury to, or a disability of, the insured person as a result of accident or sickness; or
iii: the insured person being found to have a stated condition or disease:
e: a contract of insurance that constitutes an investment account contract:
f: a contract of insurance that constitutes an investment-linked contract (within the meaning of section 98
2: However, subsection (1) is subject to subsections (3) and (4) and section 85
3: A contract that provides for the payment of a benefit on the death of a person is not a life policy if,—
a: by the terms of the contract, the duration of the contract is to be not more than 1 year; and
b: payment is only to be made in the event of—
i: death by accident; or
ii: death resulting from a stated condition or disease.
4: A contract of insurance is not a life policy if it is of a class declared by the regulations not to be life policies.
5: In subsection (1)﻿(e), investment account contract
a: provides for benefits to be paid—
i: on death; or
ii: on a specified date or specified dates or on death before the specified date, or the last of the specified dates, as the case may be; and
b: provides for the benefits to be calculated by reference to units the value of which are guaranteed by the contract not to be reduced; and
c: provides for the account to be increased (for example, by the amounts of premiums paid or interest payable).
6: However, a contract is not an investment account contract if it provides for the account to be reduced otherwise than by the amounts of withdrawals by the person responsible for the payment of premiums or by the amounts of charges payable under the contract.
85: Composite policies
1: This section applies to contracts of insurance that provide for both life insurance and non-life insurance.
2: For the purposes of this subpart,—
a: if, in relation to an insurance product line, the proportion of the premiums that relate to life insurance is less than 25%, each contract of insurance in the insurance product line must be treated as if it were not a life policy:
b: if, in relation to an insurance product line, the proportion of the premiums that relate to non-life insurance is less than 25%, each contract of insurance in the insurance product line must be treated as if it were a life policy:
c: in relation to each contract of insurance in any other insurance product line,—
i: to the extent that the contract of insurance relates to life insurance, it must be treated as being a life policy that is separate from the parts of the contract that do not relate to life insurance; and
ii: to the extent that the contract of insurance relates to non-life insurance, it must be treated as being a contract of insurance that is separate from the life policy referred to in subparagraph (i); and
iii: for the purposes of subparagraphs (i) and (ii), the insurer must fairly apportion the premium between those separate contracts.
3: The proportion of the premiums that relate to either life insurance or non-life insurance must be determined by the appointed actuary.
4: For the purposes of subsection (3), the appointed actuary must determine the proportions on the basis of premiums allocated, or expected to be allocated, as at the time that the contracts of insurance are entered into.
5: This section is subject to section 84(3) and (4)
6: In this section,— insurance product line life insurance section 84(1)﻿(a) to (f) non-life insurance
86: Interpretation in this subpart
1: In this subpart, unless the context otherwise requires,— life insurance business
a: business that consists of either or both of the following:
i: the issuing of life policies:
ii: the undertaking of liability under life policies; and
b: any business that relates to business referred to in paragraph (a) (including, without limitation, business relating to the investment, administration, and management of the assets of a statutory fund) policy document policy liability
a: a liability that has arisen under a life policy:
b: a liability that, subject to the terms and conditions of a life policy, will arise on the happening of an event, or at a time, specified in the policy.
2: A reference in this subpart to the business of a statutory fund
3: For the purposes of this subpart,—
a: a liability (including a policy liability) is taken to be referable to the business of a statutory fund if the liability is of a kind that, under this subpart, may be discharged out of the assets of the fund:
b: an expense is taken to be referable to the business of a statutory fund if the expense is of a kind that, under this subpart, may be met out of the assets of the fund:
c: a life insurer issues a life policy when the insurer enters into the contract that constitutes the policy.
87: Duty of life insurer in relation to statutory funds
1: In the investment, administration, and management of the assets of a statutory fund, a life insurer—
a: must comply with this subpart; and
b: must give priority to the interests of policyholders of life policies referable to the fund.
2: In the event of conflict between the interests of policyholders of life policies referable to a statutory fund and the interests of shareholders or members of a life insurer, the life insurer must give priority to the interests of policyholders of those policies over the interests of shareholders or members.
3: An act or decision of a life insurer in relation to a statutory fund does not contravene subsection (1)﻿(b) if, having regard to the circumstances existing at the time of the act or decision, it is reasonable to believe that the act or decision gives priority to the interests of policyholders of life policies referable to the fund.
4: An investment by a life insurer is not ineffective merely because it is made in contravention of subsection (1)﻿(b).
5: A reference in subsections (1) to (3) to the interests of policyholders of life policies referable to a statutory fund is a reference to the interests of those persons viewed as a group.
6: Nothing in subsection (1) prevents a life insurer doing anything that the life insurer is permitted by or under this subpart to do.
88: Notice to Bank when fund established
1: If a life insurer establishes a statutory fund otherwise than under an approval given under section 109
a: the establishment of the fund; and
b: the date on which the fund was established; and
c: the nature of the life insurance business of the life insurer to which the fund relates; and
d: any other prescribed matters.
2: The notice must be given in the prescribed manner.
89: Life insurer must transfer assets on establishment
A life insurer must transfer to a statutory fund on its establishment assets of a value that is ascertained in the prescribed manner.
90: Assets of statutory fund
1: For the purposes of this Act, the assets of a statutory fund at a particular time are the following:
a: the balance of money represented by amounts credited to the fund in accordance with section 92
b: assets of the life insurer obtained as a result of the expenditure or application of money credited to the fund:
c: investments held by the life insurer as a result of the expenditure or application of money credited to the fund:
d: other money, assets, or investments of the life insurer transferred to the fund, whether under this subpart or otherwise.
2: Assets or investments obtained by the application of assets (other than money) of a statutory fund are themselves assets of the fund.
3: A life insurer must keep assets of a statutory fund distinct and separate from assets of other statutory funds and from all other money, assets, or investments of the life insurer.
4: Nothing in this subpart is intended to constitute a life insurer or the directors of a life insurer a trustee or trustees of the assets of the statutory funds of the life insurer.
91: Identification of life policies referable to statutory fund
1: A policy document must specify the statutory fund or statutory funds to which the life policy is referable.
2: A policy document must not make provision inconsistent with section 82
3: A provision in a policy document that a life policy is referable to 2 or more statutory funds is not effective unless it specifies—
a: the benefits under the policy that are to be provided out of each fund; and
b: either—
i: the proportion of the premium that is related to the benefits to be provided out of each fund and is to be credited to the fund; or
ii: the way in which that proportion is to be calculated.
4: Subsection (1) does not prevent a policy document being endorsed so as to change the statutory fund or funds to which the life policy is referable.
5: If a life policy was issued before the commencement of this section and, since that commencement, the life insurer that issued the policy has given the policyholder written notice of the statutory fund or funds to which the policy is referable, this subpart has effect as if the notice were part of the policy document relating to the policy.
6: During the period of 12 months beginning at the commencement of this section, subsection (1) does not apply to the policy document relating to a life policy issued before the commencement of this section.
92: Payments to statutory fund
The following amounts must be credited by a life insurer to a statutory fund:
a: amounts that must, in accordance with the regulations, be credited to the statutory fund on its establishment:
b: premiums payable under life policies referable solely to the fund:
c: in the case of a life policy that is referable to the fund and to 1 or more other statutory funds, the proportion of the premium that, by virtue of a provision in the policy document, is to be credited to the fund:
d: amounts paid to the life insurer in relation to a liability under section 105 107
e: income from the investment of assets of the fund:
f: money paid to or by the life insurer to the credit of the fund under a judgment of a court relating to any matter concerning the business of the fund or any failure to comply with this subpart in relation to the fund:
g: any other money received by the life insurer in connection with its conduct of the business of the fund.
93: Capital payments to statutory funds
1: Nothing in this subpart prevents a life insurer from making a capital payment to a statutory fund.
2: For the purposes of this subpart, a life insurer makes a capital payment to a statutory fund if it credits to the fund an amount that—
a: is not required to be credited to the fund; and
b: does not represent any part of the assets of another statutory fund.
94: Expenditure and application of statutory fund
1: A life insurer must not apply, or deal with, assets of a statutory fund, whether directly or indirectly, except in accordance with this section.
2: The assets of a statutory fund may only be applied by the life insurer—
a: to meet liabilities (including policy liabilities) or expenses incurred for the purposes of the business of the fund; or
b: for the making of investments in accordance with section 99
c: for the purposes of a distribution under section 114 115
3: A life insurer must not mortgage or charge any of the assets of a statutory fund except to secure a bank overdraft for the purposes of the business of the statutory fund.
4: A life insurer must not borrow money, for the purposes of the business of a statutory fund, by means of an unsecured borrowing if the result would be that the total amount of principal outstanding under unsecured borrowings for the purposes of the business of the fund would exceed an amount ascertained in the prescribed manner.
5: In subsection (4), unsecured borrowing
a: a borrowing of money by means of a bank overdraft; or
b: a borrowing of money by means of a prescribed arrangement.
6: The assets of a statutory fund are not available to meet a liability of a life insurer under a contract of guarantee unless—
a: the contract of guarantee was entered into by the life insurer in connection with an investment by the life insurer of assets of the fund; and
b: the investment was made in accordance with this subpart.
7: Nothing in this section applies to the transfer of assets from one statutory fund to another in accordance with sections 109 to 111 section 114 115
95: Prohibition of reinsurance between funds
1: A life insurer fails to comply with this subpart if it engages in the practice of reinsurance between statutory funds of the life insurer.
2: For the purposes of subsection (1), the practice of reinsurance between statutory funds consists of the following elements:
a: part of the premium payable under a life policy referable to one statutory fund is credited to another statutory fund to which the policy is not referable (the reinsuring fund
b: a corresponding proportion of the liability under the life policy is treated as a liability for the discharge of which the assets of the reinsuring fund are available.
96: Effect of non-compliance with section 94: general
1: A transaction (other than a transaction to which section 97 section 94
2: Subsection (1) is subject to subsection (3) and section 87(4)
3: The High Court, on application by a party to the transaction, may make an order declaring that the transaction is effective, and is to be taken always to have been effective, for all purposes.
4: If the High Court is satisfied that the applicant entered into the transaction in good faith and without knowledge of the contravention of section 94
5: Subsection (4) does not limit the matters to which the High Court may have regard on an application under subsection (3).
97: Effect of non-compliance with section 94: certain classes of transactions
1: A transaction that is included in a class of transactions declared by the regulations to be transactions to which this section applies is not ineffective merely because it was entered into in contravention of section 94
2: The High Court, on application by the Bank, may make an order declaring that a particular transaction entered into in contravention of section 94
3: The High Court must not make an order under subsection (2) if it is satisfied that the effect of the order (if made) would be to prejudice the rights of any person in respect of, or arising out of, the transaction that have been acquired in good faith and without knowledge of the contravention.
98: Investment performance guarantee: limit of certain liabilities
1: This section applies to a statutory fund if—
a: the business of the fund includes the provision of investment-linked benefits; and
b: any of the policies referable to the fund includes an investment performance guarantee.
2: A life insurer must at all times comply with the restrictions on, and other requirements in respect of, the investment performance guarantee that are prescribed for the purposes of this section (if any).
3: In this section,— investment-linked benefits investment-linked contract
a: the principal object of which is the provision of benefits calculated by reference to units the value of which is related to the market value of a specified class or group of assets of the party by whom the benefits are to be provided; and
b: that provides for benefits to be paid—
i: on death; or
ii: on a specified date or specified dates or on death before the specified date, or the last of the specified dates, as the case may be investment performance guarantee
99: Investment of statutory funds
1: A life insurer may invest the assets of a statutory fund in any way that is likely to further the business of the fund.
2: However, subsection (1) is subject to the following qualifications:
a: nothing in this subpart authorises a life insurer to make an investment the life insurer would otherwise be prohibited from making:
b: nothing in this subpart authorises a life insurer to make an investment the life insurer would not otherwise have the power to make:
c: except with the approval of the Bank or otherwise in the prescribed circumstances, a life insurer must not invest assets of a statutory fund in an associated person that is not a subsidiary of the life insurer:
d: a life insurer must not invest assets of a statutory fund, or keep assets of a statutory fund invested, in a subsidiary of the life insurer if the investment, or the retention of the investment, as the case requires, is prohibited by the regulations.
3: The Bank's approval under subsection (2)﻿(c) may be given—
a: when the licence is issued to the life insurer or at any other time; and
b: in relation to a particular investment or investments of a particular class.
4: Nothing in subsection (2)﻿(c) or (d) prevents a life insurer investing assets of a statutory fund, or keeping assets of a statutory fund invested, in ordinary voting shares of public issuers that are associated persons of the life insurer (whether or not they are subsidiaries) if the value of the assets of the fund so invested does not exceed a prescribed percentage of the value of all assets of the fund.
5: A transaction is not ineffective merely because it involves a contravention of subsection (2)﻿(c) or (d).
6: Nothing in this section—
a: prevents a life insurer from investing money of a statutory fund by way of deposit with—
i: a registered bank (within the meaning of the Banking (Prudential Supervision) Act 1989
ii: a bank that is authorised to accept deposits under the law of an overseas jurisdiction; or
b: requires the approval of the Bank for such an investment.
7: For the purposes of this subpart, an investment by way of a loan is to be taken to be made when the loan agreement is entered into.
8: In this section, public issuer
a: a licensed market (within the meaning of section 6(1)
b: a securities market that is authorised to operate in an overseas jurisdiction in accordance with the laws of that jurisdiction. Section 99(6)﻿(a)﻿(i) amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 99(8) replaced 1 December 2014 section 150 Financial Markets (Repeals and Amendments) Act 2013
100: Recording of restricted investments
1: A life insurer must, in the prescribed manner, keep a record of its restricted investments.
2: In this section, restricted investment
a: means any investment of assets of a statutory fund of a life insurer in a related party; but
b: does not include an investment of assets of a statutory fund by way of deposit with a registered bank (within the meaning of the Banking (Prudential Supervision) Act 1989 Section 100(2)﻿(b) amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021
101: Transfer of assets between funds
1: A life insurer must not transfer an asset from one statutory fund to another statutory fund except in accordance with subsection (2), or sections 109 to 111 section 114 115
2: A life insurer may transfer an asset from one statutory fund (the losing fund gaining fund
a: the life insurer transfers from the gaining fund to the losing fund an amount equal to the fair value of the asset; and
b: in relation to the policyholders of life policies referable to the losing fund and the gaining fund, the transfer is fair and reasonable in all the circumstances.
3: For the purposes of subsection (2), the fair value
4: Subsection (1) does not prevent a liquidator doing anything authorised or required by or under any enactment.
102: Restriction on restructure or termination of statutory funds
1: A life insurer must not change the statutory fund or funds to which a life policy is referable, or terminate a statutory fund, except in accordance with sections 91(4) 111 section 109 110
2: Subsection (1) does not prevent a liquidator doing anything authorised or required by or under any enactment.
103: Ascertainment of income and outgoings of statutory fund and providing for apportionment of income, outgoings, and liabilities
1: The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, make regulations that—
a: specify what constitutes income of a statutory fund; and
b: specify what constitutes outgoings of a statutory fund; and
c: provide for the apportionment of amounts of income or outgoings or of liabilities so as to determine the part of the amount or portion of the liability that is related or referrable to the business of a statutory fund or to a category of business of a statutory fund.
2: If regulations are made for the purposes of subsection (1), then, for the purposes of this subpart,—
a: what constitutes income of a statutory fund must be determined in accordance with the regulations; and
b: what constitutes outgoings of a statutory fund must be determined in accordance with the regulations; and
c: what part of an amount of income or outgoings or portion of a liability that is related or referrable to the business of a statutory fund or to a category of business of a statutory fund must be determined in accordance with the regulations.
3: Regulations under this section are secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 103(3) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
104: Life insurer must keep records of income and outgoings
A life insurer must keep records of the income and outgoings of each statutory fund of the insurer that properly record the affairs and transactions of the insurer in respect of those funds. Duties and liabilities of directors, etc
105: Duty of directors in relation to statutory funds
1: A director of a life insurer has a duty to the policyholders of life policies referable to a statutory fund of the life insurer to take reasonable care, and use due diligence, to see that, in the investment, administration, and management of the assets of the fund, the life insurer—
a: complies with this subpart; and
b: gives priority to the interests of policyholders of life policies referable to the fund.
2: In the event of conflict between the interests of policyholders of life policies referable to a statutory fund and the interests of shareholders or members of a life insurer, a director’s duty is to take reasonable care, and use due diligence, to see that the life insurer gives priority to the interests of policyholders of those policies over the interests of shareholders or members.
3: A reference in subsection (1) or (2) to the interests of policyholders of life policies referable to a statutory fund is a reference to the interests of those persons viewed as a group.
4: A director of a life insurer does not commit a breach of duty because of the doing of an act by the life insurer if the life insurer is permitted by or under this subpart to do the act.
5: If, in respect of any act or omission of a life insurer, a director of the life insurer has failed to comply with subsection (1) and the act or omission of the life insurer results in a loss to a statutory fund of the life insurer, the director is liable to pay to the life insurer an amount equal to the amount of the loss.
6: If 2 or more persons are liable under subsection (5) in relation to the same act or omission, the liability of those persons is joint and several.
7: An action under subsection (5) may be brought—
a: by the life insurer; or
b: with the written approval of the Bank, by the policyholder of a life policy referable to the statutory fund involved.
8: An approval under subsection (7)﻿(b) may be given subject to conditions relating to the persons, or the number of persons, who may join in the action as plaintiffs.
9: A person cannot be ordered to pay an amount under this section and under section 107
10: This section applies despite anything to the contrary in the Companies Act 1993
106: Bank may give notice
1: If a life insurer has failed to comply with this subpart, the Bank may give the life insurer a written notice requiring the life insurer, within a specified period, to take the action that is specified in the notice to remedy the failure.
2: The period specified in the notice must be a period ending not earlier than 1 month after the giving of the notice.
3: The action to be specified in the notice is the action that the Bank thinks appropriate and reasonable to overcome the effects of the failure to comply.
4: At any time before the end of the period specified in the notice, the Bank may extend the period by any further period that the Bank thinks fit.
5: A life insurer must comply with a notice under subsection (1).
107: Liability of directors
1: Subsection (2) applies if—
a: the Bank has given a notice to a life insurer under section 106
b: the contravention has resulted in a loss to a statutory fund; and
c: the life insurer has failed to comply with the notice within the period specified in it or within that period as extended under section 106(4)
2: The persons who were the directors of the life insurer when the contravention of this subpart occurred are jointly and severally liable to pay to the life insurer an amount equal to the amount of the loss.
3: A person is not liable under subsection (2) if the person proves that he or she used due diligence to prevent the occurrence of the contravention or to ensure that the life insurer complied with the notice.
108: Bank’s power to sue in name of life insurer
1: If the Bank thinks that it is in the interests of the policyholders of life policies referable to a statutory fund to do so, the Bank may bring an action against a person in the name, and for the benefit, of a life insurer for the recovery of an amount that the life insurer is entitled to recover under section 107
2: In an action under subsection (1), the court may make any order in the matter as to costs and otherwise as it thinks fit. Restructure and termination of statutory funds
109: Restructure of statutory funds
1: A life insurer may apply to the Bank to restructure its statutory funds by making 1 or more life policies that are referable to a statutory fund or funds of the life insurer become referable to another statutory fund or funds of the life insurer (whether existing or proposed).
2: If the application is approved, the restructure may take place in accordance with any conditions that the Bank may impose.
3: The conditions may include (without limitation) conditions relating to the following:
a: a requirement to notify interested persons of the outcome of the application:
b: matters connected with how the restructure takes place, including the following:
i: life policies becoming referable to a receiving fund or funds:
ii: policy liabilities and other liabilities becoming referable to a receiving fund or funds:
iii: assets of a transferring fund becoming assets of a receiving fund or funds:
iv: the timing of the restructure:
v: if a receiving fund is a proposed new statutory fund, the establishment of that fund.
4: The Bank must not approve the application if it considers that—
a: the restructure will result in unfairness to the policyholders of life policies referable to a transferring fund or a receiving fund when those policyholders are viewed as a group; or
b: immediately after the restructure,—
i: the life insurer will fail to maintain a solvency margin in respect of a transferring fund; or
ii: the life insurer will fail to maintain a solvency margin in respect of a receiving fund; or
c: the life insurer is being liquidated or wound up when the application is made.
5: Subsection (4)﻿(b)﻿(i) does not apply if the transferring fund is to be wound up.
6: In this section,— receiving fund transferring fund
110: Termination of statutory funds
1: A life insurer may apply to the Bank to terminate 1 or more of its statutory funds.
2: If the application is approved, the termination may take place in accordance with any conditions that the Bank may impose.
3: The conditions may include (without limitation) conditions relating to the following:
a: a requirement to notify interested parties of the outcome of the application:
b: matters connected with how the termination takes place, including the following:
i: distribution or application of assets:
ii: settling of liabilities:
iii: the timing of the termination.
4: The Bank must not approve the application if it considers that—
a: the termination will result in unfairness to the policyholders of life policies referable to the fund or funds when those policyholders are viewed as a group; or
b: the life insurer is being liquidated or wound up when the application is made. Additional requirements for transfer of life policies between statutory funds by endorsement
111: Additional requirements for transfer of life policies between statutory funds by endorsement
1: Subsection (2) applies if—
a: a life insurer has more than 1 statutory fund; and
b: because of an endorsement referred to in section 91(4)
i: a life policy has ceased to be referable to one of those funds and become referable to another fund; or
ii: a life policy referable to 1 or more of those funds has become referable to a further fund or funds.
2: The life insurer must transfer to each fund to which the policy has become referable assets of a value equivalent to such part of the liabilities of the life insurer as is ascertained in the prescribed manner.
3: If, because of an endorsement referred to in section 91(4)
4: In this section, liabilities
a: policy liabilities; and
b: reserves; and
c: any other liabilities of the life insurer. Allocation of profits and losses and of capital payments and distribution of profits and capital
112: Life insurer must allocate operating profits and losses in accordance with prescribed requirements
1: A life insurer must, in the prescribed circumstances and in the prescribed manner, allocate the operating profit or operating loss of—
a: a statutory fund; or
b: a category of business of a statutory fund.
2: The categories of business of a statutory fund for the purposes of this subpart are the categories of business that are determined in the prescribed manner.
113: Allocation of capital
1: A life insurer must allocate to shareholders’ or members' capital of a statutory fund all capital payments made to the fund under section 93
2: A life insurer allocates a capital payment by—
a: identifying in its financial statements prepared as at the end of the period in which the payment was made the amount of the payment; and
b: identifying that amount as an amount that should be added to shareholders’ or members' capital.
114: Distribution of retained profits
The distribution of retained profits of a statutory fund may be made only in accordance with the prescribed requirements.
115: Distribution of shareholders’ or members' capital
A distribution of shareholders’ or members' capital in relation to a statutory fund may be made only in accordance with the prescribed requirements. Application of statutory fund assets on liquidation or winding up
116: Application of statutory fund assets
1: In a liquidation or other winding up of a life insurer, the assets of a statutory fund (the primary fund
a: the fees and expenses properly incurred by the liquidator in carrying out the duties and exercising the powers of the liquidator, and the remuneration of the liquidator:
b: the reasonable costs of a person who applied to a court for an order that the insurer be put into liquidation or wound up, including the reasonable costs incurred between lawyer and client in procuring the order:
c: the actual out-of-pocket expenses necessarily incurred by any liquidation committee:
d: to any creditor who protects, preserves the value of, or recovers assets of the primary fund for the benefit of the insurer's creditors by the payment of money or the giving of an indemnity,—
i: the amount received by the liquidator by the realisation of those assets, up to the value of that creditor's unsecured debt; and
ii: the amount of the costs incurred by that creditor in protecting, preserving the value of, or recovering those assets.
2: In this section, liquidator
3: Subsection (1) has effect only to the extent that expenses, fees, debts, and claims are liabilities that are referable to the business of the primary fund.
4: If any assets remain after the application of subsection (1), the assets must be applied according to the following rules:
a: the assets are to be applied first in discharge of policy liabilities of the life insurer referable to the primary fund:
b: if any assets remain, they are to be applied in discharge of other liabilities that are referable to the business of the primary fund:
c: if, after the application of assets according to paragraphs (a) and (b), any assets of the primary fund remain, those assets are to be applied in the manner that the High Court directs.
5: If, for the purposes of subsection (4)﻿(a), the assets are insufficient to discharge all of the policy liabilities of the life insurer referable to the primary fund, the assets are to be applied in discharge of those policy liabilities in the manner that the High Court directs.
6: If, for the purposes of subsection (4)﻿(b), the assets are insufficient to discharge all of the other liabilities that are referable to the business of the primary fund, the assets are to be applied in discharge of those liabilities in the manner that the High Court directs.
7: Directions given for the purpose of subsection (4)﻿(c), (5), or (6) are to be the directions that the High Court considers equitable, having regard to,—
a: in the case of subsection (4)﻿(c),—
i: the interests of the policyholders of life policies referable to the primary fund; and
ii: the interests of the policyholders of life policies referable to statutory funds of the life insurer other than the primary fund; and
iii: the interests of creditors of the life insurer whose debts have not been discharged by the application of assets according to subsection (4)﻿(b); and
iv: the interests of shareholders or members of the life insurer:
b: in the case of subsection (5), the interests of the policyholders of life policies referable to the primary fund:
c: in the case of subsection (6), the interests of creditors in respect of the other liabilities that are referable to the business of the primary fund.
8: The reference in subsection (7)﻿(a)﻿(iii) to creditors of a life insurer is not limited to creditors to whom amounts are due in relation to the business of a statutory fund, but includes all creditors of a life insurer, whatever the nature of the liabilities involved.
9: If a liability of the life insurer is referable to 2 or more statutory funds or is referable in part to a statutory fund but is also related to business, other than life insurance business, carried on by the insurer, the liquidator may apportion the liability so as to determine the part of the liability that is to be borne by each of the statutory funds or by the statutory fund, as the case may be.
10: In making an apportionment under subsection (9), the liquidator must comply with any directions of the High Court.
11: The part of the amount so determined in relation to a statutory fund is to be treated as a liability of the life insurer that is referable to the business of the fund.
12: This section applies despite anything to the contrary in the Companies Act 1993 Liability of directors for loss to statutory fund
117: Liability of directors for loss to statutory fund
1: Subsection (2) applies if—
a: a life insurer contravenes this subpart in relation to a statutory fund; and
b: the contravention results in a loss to the statutory fund; and
c: the life insurer has been put into liquidation or is otherwise being wound up.
2: The persons who were the directors of the life insurer when the contravention occurred are jointly and severally liable to pay to the insurer an amount equal to the amount of the loss.
3: A person is not liable under subsection (2) if the person proves that he or she used due diligence to prevent the occurrence of the contravention.
4: On application by the liquidator of the licensed insurer, the High Court may order any person liable under subsection (2) to pay to the insurer the whole or any part of the loss.
5: A person cannot be made liable both under this section and under sections 105 to 108 Offence
118: Offence to fail to comply with subpart
1: A life insurer commits an offence if it fails to comply with this subpart and is liable, on
2: Section 216 Section 118(1) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Exemptions
119: Bank may exempt overseas insurers from compliance with subpart
1: The Bank may, by notice to an overseas insurer, exempt the insurer (and its directors) from compliance with this subpart.
2: The Bank must, before granting an exemption, be satisfied that—
a: the overseas insurer is required, under the law or other regulatory requirements of the home jurisdiction of the insurer, to maintain, in respect of its life insurance business, a statutory fund or other arrangement for separating its life insurance obligations from its other obligations; and
b: there is no overseas policyholder preference in relation to payments out of, or in respect of, the statutory fund or arrangement; and
c: the nature and extent of prudential supervision that applies in respect of the statutory fund or arrangement is, in terms of achieving the purposes of this Act, at least as satisfactory as the nature and extent of prudential supervision that applies in respect of statutory funds under this subpart.
3: The matters in subsection (2) must be treated as being satisfied in respect of an overseas insurer that is incorporated in a jurisdiction that is prescribed for the purposes of this subsection.
4: This section is subject to section 232
3: Prudential supervision of licensed insurers
Bank to undertake prudential supervision
120: Prudential supervision
The Bank must in accordance with this Part undertake prudential supervision of licensed insurers. Supply of information
121: Supply of information by licensed insurers for purposes of prudential supervision
1: For the purposes of this Act, the Bank may, by notice in writing to any licensed insurer, require the insurer to supply to the Bank any information, data, or forecasts about any matters relating to the business, operation, or management of the insurer.
2: For the purposes of this Part, a reference to matters relating to the business, operation, or management of a person includes the corporate, financial, or prudential matters of the person.
3: A licensed insurer may be required to supply information, data, or forecasts—
a: relating to business carried on by the insurer in New Zealand or elsewhere (or both); and
b: in a consolidated form (if specified by the Bank).
4: The notice may specify—
a: the periods for which, and the form in which, the information, data, or forecasts must be supplied; and
b: the time by which, and the manner in which, the information, data, or forecasts must be supplied.
5: The Bank may, by a subsequent notice, vary, revoke, or amend a notice.
6: A licensed insurer commits an offence if the insurer fails to comply with any requirements of the Bank under this section and is liable, on Section 121(6) amended 1 July 2013 section 413 Criminal Procedure Act 2011
122: Notice may require supply of information, data, or forecasts in relation to associated persons
The Bank may, by notice under section 121
123: Associated persons may be required to supply information to licensed insurers
1: An associated person of a licensed insurer must, on being required by the insurer to do so, supply the insurer with information, data, or forecasts relating to the person in order to enable the insurer to comply with a notice under section 121
2: A person commits an offence if the person fails to comply with this section and is liable, on
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
b: in the case of a body corporate, to a fine not exceeding $500,000. Section 123(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
124: Supply of information by other persons for purposes of prudential supervision
1: If the Bank has reasonable grounds to believe that a person has information, data, or forecasts that the Bank could require a licensed insurer to supply under section 121
2: The notice may specify—
a: the periods for which, and the form in which, the information, data, or forecasts must be supplied; and
b: the time by which, and the manner in which, the information, data, or forecasts must be supplied.
3: The Bank may, by a subsequent notice, vary, revoke, or amend a notice.
4: A person commits an offence if the person fails to comply with any requirements of the Bank under this section and is liable, on
a: in the case of an individual, to a fine not exceeding $50,000:
b: in the case of a body corporate, to a fine not exceeding $100,000. Section 124(4) amended 1 July 2013 section 413 Criminal Procedure Act 2011
125: Requirement that information, data, or forecasts be audited or reviewed
1: The Bank may, by notice in writing, require a licensed insurer or other person to obtain an audit or a review, by an auditor, actuary, or other person approved by the Bank, of any information, data, or forecasts that the insurer or other person, as the case may be, is required to supply under section 121 124
2: A licensed insurer or other person commits an offence if the insurer or person fails to comply with this section and is liable, on
a: in the case of an individual, to a fine not exceeding $50,000:
b: in the case of a body corporate, to a fine not exceeding $100,000. Section 125(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
126: Bank may require report relating to licensed insurers or associated persons
1: The Bank may, by notice in writing to a licensed insurer, require the insurer to supply the Bank with a report or series of reports, prepared by a person approved by the Bank, on any matters relating to the business, operation, or management of either or both of the following:
a: the insurer:
b: any associated person of the insurer.
2: The notice under subsection (1) must contain a statement of the reasons why the Bank wants the report or series of reports to be supplied.
3: An associated person of the licensed insurer must, if required to do so by the insurer, supply information relating to the person in order to enable the insurer to comply with a notice under this section.
4: A licensed insurer or an associated person of the insurer commits an offence if the insurer or person fails to comply with this section and is liable, on
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
b: in the case of a body corporate, to a fine not exceeding $500,000. Section 126(4) amended 1 July 2013 section 413 Criminal Procedure Act 2011
127: Disclosure of information to Bank by auditors and actuaries
Every person who holds, or at any time has held, office as required by any enactment, as an auditor of a licensed insurer or of an associated person of a licensed insurer or as an appointed actuary, must disclose to the Bank information relating to the affairs of the insurer or associated person obtained in the course of holding that office if, in the opinion of that person,—
a: the licensed insurer or associated person—
i: is failing to maintain a solvency margin or is likely to fail to maintain a solvency margin at any time within the next 3 years; or
ii: is in serious financial difficulties; or
iii: is, or has been, operating fraudulently or recklessly; and
b: the disclosure of that information is likely to assist, or be relevant to, the exercise by the Bank of its powers under this Act.
128: Auditor or actuary to inform of intention to disclose
Every auditor or actuary must, before disclosing any information to the Bank under section 127
129: Protection of auditors and actuaries
1: No civil, criminal, or disciplinary proceedings lie against any auditor or actuary arising from the disclosure in good faith of information to the Bank under section 127
2: No tribunal, body, or authority having jurisdiction in respect of the professional conduct of any auditor or actuary may make any order against, or do any act in relation to, that person in respect of the disclosure referred to in subsection (1).
3: No information received by the Bank under section 127
4: Nothing in subsection (3) limits the admissibility of any information obtained in any other way. Investigations
130: Investigations
1: Subsection (2) applies if the Bank has reasonable cause to suspect that 1 or more of the following applies:
a: a licensed insurer has failed, is failing, or is likely to fail to maintain a solvency margin:
b: the business of a licensed insurer has not been, or is not being, conducted in a prudent manner:
c: a licensed insurer has been or is operating fraudulently or recklessly:
d: a licensed insurer or an associated person has failed to comply with any requirement to supply information, data, or forecasts under this Part, or any information or data supplied by the insurer or person under this Part is false or misleading in a material particular:
e: a licensed insurer has failed, is failing, or is likely to fail to comply with any direction, condition, or any other requirement imposed by or under this Act or the regulations.
2: The Bank may do either or both of the following if it considers it is reasonably necessary for the purposes of carrying out its functions and exercising its powers under this Act:
a: by notice in writing to the licensed insurer or associated person, require the insurer or person to supply to the Bank, within the time specified in the notice, the information or data specified in the notice:
b: appoint, in writing, any suitably qualified person (an investigator
3: A licensed insurer or an associated person commits an offence if the insurer or person fails to comply with any requirement of the Bank under subsection (2)﻿(a) and is liable, on
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
b: in the case of a body corporate, to a fine not exceeding $500,000. Section 130(3) amended 1 July 2013 section 413 Criminal Procedure Act 2011
131: Power to obtain information or documents
1: An investigator may, for the purposes of carrying out an investigation of the affairs of a licensed insurer or an associated person,—
a: by notice in writing, require the insurer or associated person, or any officer or employee of the insurer or associated person, or any other person, to—
i: supply any information or data relating to the business, operation, or management of the insurer or associated person:
ii: produce for inspection any documents of or relating to the business, operation, or management of the insurer or associated person that are in the custody or under the control of the insurer or associated person, officer, employee, or other person:
iii: if necessary, reproduce in usable form any information recorded or stored in those documents:
b: take copies of any documents produced for inspection under paragraph (a).
2: An investigator who exercises any powers conferred by subsection (1) must, if requested, produce the instrument of the investigator's appointment.
132: Power to enter and search place
1: An investigator may, for the purposes of carrying out an investigation of the affairs of a licensed insurer or an associated person, enter and search any place if—
a: the occupier of the place consents; or
b: the investigator obtains a warrant under this section.
2: An issuing officer (within the meaning of section 3 subpart 3
a: that it is reasonably necessary for the purpose of determining whether to exercise any powers conferred on the Bank under this Act that an investigation of the affairs of a licensed insurer or an associated person should be carried out:
b: that a licensed insurer or another person has failed to comply with any requirement to supply information, data, or forecasts under this Part, or any information, data, or forecasts supplied by the insurer or other person under this Part are false or misleading in a material particular:
c: that a licensed insurer has failed, is failing, or is likely to fail to comply with any direction, condition, or other requirement imposed by or under this Act or the regulations.
3: The provisions of Part 4 sections 118 119 Section 132(2) amended 1 October 2012 section 265(2) Search and Surveillance Act 2012 Section 132(3) replaced 1 October 2012 section 265(3) Search and Surveillance Act 2012
133: Offences in relation to investigations
1: Every person commits an offence who—
a: hinders, obstructs, or delays an investigator in the carrying out of an investigation under this Act; or
b: fails to comply with any lawful requirement of an investigator.
2: A person who commits an offence under this section is liable on
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
b: in the case of a body corporate, to a fine not exceeding $500,000. Section 133(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
134: Effect of final decision that exercise of powers under sections 130 and 131 unlawful
In any case where it is declared in a final decision given in any proceedings in respect of the exercise of powers conferred by sections 130 131
a: the Bank must ensure that as soon as is reasonably practicable after the decision of the court is given—
i: any information or data supplied by the licensed insurer or person under section 130(2)﻿(a) 131(1)﻿(a)
ii: any documents or extracts from documents obtained pursuant to an inspection made under section 131(1)﻿(a)
iii: any information derived from or based upon any such information and data or documents or extracts is destroyed:
b: no information or data supplied by the licensed insurer or person under section 130(2)﻿(a) 131(1)﻿(a) section 131(1)﻿(a)
i: are admissible in evidence in any proceedings:
ii: may be used in connection with the exercise of any power conferred by Part 4 5 Miscellaneous provisions
135: Confidentiality of information, data, documents, and forecasts
1: This section applies to—
a: information, data, documents, and forecasts supplied or disclosed to or obtained by the following under, or for the purposes of, or in connection with the exercise of powers conferred by, this Act:
i: the Bank; or
ii: an investigator:
b: information and data derived from or based upon information, data, documents, and forecasts referred to in paragraph (a):
c: information relating to the exercise, or possible exercise, of the powers conferred by this Act.
2: The Bank may publish or disclose any information, data, document, or forecast to which this section applies only if—
a: the information, data, document, or forecast is available to the public under any Act (other than the Official Information Act 1982
b: the information or data or forecast is in a statistical or summary form; or
c: the publication or disclosure of the information, data, document, or forecast is for the purposes of, or in connection with, the performance or exercise of any function, power, or duty conferred or imposed on the Bank by this Act or any other legislation; or
d: the publication or disclosure is made under subpart 3
e: the publication or disclosure of the information, data, document, or forecast is to any person that the Bank is satisfied has a proper interest in receiving the information, data, document, or forecast; or
f: the publication or disclosure of the information, data, document, or forecast is with the consent of the person to whom that material relates or of the person to whom that material is confidential.
3: The Bank must not publish or disclose information, data, a document, or a forecast under subsection (2)﻿(e)
4: An officer or employee of the Bank or an investigator must not publish or disclose any information, data, document, or forecast to which this section applies except for the purposes of, or in connection with, the performance or exercise of any function or power conferred by this Act or any other enactment.
5: An officer or employee of the Bank or an investigator commits an offence if the officer, employee, or investigator fails to comply with this section and is liable, on
6: The Bank may make information, data, a document, or a forecast to which this section applies available under the Official Information Act 1982 Section 135(2)﻿(a) amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 135(2)﻿(c) replaced 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 135(2)﻿(d) replaced 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 135(3) amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 135(5) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 135(6) inserted 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021
136: Limits on further disclosure of information, data, documents, or forecasts
1: A person to whom any information, data, document, or forecast is published or disclosed under section 135(2)﻿(c), (e), or (f)
a: in the case of a publication or disclosure under section 135(2)﻿(c)
i: for the purposes of, or in connection with, the performance or exercise of any function, power, or duty referred to in that paragraph; and
ii: in accordance with any conditions that may be imposed by the Bank:
b: in the case of a publication or disclosure under section 135(2)﻿(e)
i: authorised by the Bank and in accordance with any conditions that the Bank may have imposed; or
ii: necessary or desirable for the performance or exercise of any function or power conferred by any enactment:
c: in the case of a publication or disclosure under section 135(2)﻿(f)
2: A person commits an offence if the person fails to comply with this section and is liable, on
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
b: in the case of a body corporate, to a fine not exceeding $500,000. Section 136(1)﻿(a)﻿(i) replaced 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 136(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
137: Application of other enactments to information, data, documents, or forecasts published or disclosed under section 135
Nothing in any Act, other than this Act or the Official Information Act 1982 Local Government Official Information and Meetings Act 1987 section 135
4: Distress management
1: Recovery plans
138: Bank may require licensed insurer to prepare recovery plan
1: The Bank may give a licensed insurer a written direction to prepare a recovery plan if the Bank has reasonable grounds to believe that 1 or more of the following applies:
a: the insurer has failed, is failing, or is likely to fail to maintain a solvency margin:
b: the business of the insurer has not been, or is not being, conducted in a prudent manner:
c: the insurer has failed, is failing, or is likely to fail to comply with any direction, condition, or other requirement imposed by or under this Act or the regulations.
2: The recovery plan must—
a: be in writing; and
b: set out the actions that the licensed insurer will take to effectively address the matters that caused the Bank to give the direction and, in particular, to ensure that (as the case may be)—
i: the insurer maintains its solvency margin and, in the case of a life insurer, the insurer also maintains the solvency margin or margins that apply in respect of its statutory funds:
ii: the business of the insurer is conducted in a prudent manner:
iii: the insurer comes back into compliance, or remains compliant with, any direction, condition, or other requirement referred to in subsection (1)﻿(c); and
c: set out an appropriate timetable for taking those actions to ensure that those actions are taken as soon as practicable; and
d: describe the steps that the licensed insurer will take to ensure that the plan remains current, which must include procedures for regular review of the plan to systematically identify deficiencies in the effectiveness of the plan; and
e: be appropriate to the operations of the licensed insurer, having regard to the size of the insurer, its corporate structure (including its relationship with associated persons), its funding structure, the market sector in which it operates, and its business strategy; and
f: otherwise be prepared within the time and in the manner specified by the Bank in the direction; and
g: be approved by the licensed insurer's governing body within the time specified by the Bank in the direction.
3: The Bank may, in the direction, require the recovery plan to specify a final date (being a date that is satisfactory to the Bank) by which all of the actions referred to in subsection (2)﻿(b) must have been taken and the outcomes in subsection (2)﻿(b)﻿(i), (ii), or (iii) achieved.
4: The Bank may, in the direction, require the licensed insurer to obtain assistance in the preparation of the recovery plan from a person specified by the Bank.
5: A direction given under this section must state the grounds on which it is given.
139: Recovery plan must be provided to Bank for approval
1: The licensed insurer must, within the time specified by the Bank, provide a copy of the recovery plan to the Bank.
2: The Bank must, after receiving the copy, inform the licensed insurer whether the Bank is satisfied that the plan meets the requirements in section 138(2) and (3)
3: If the Bank is not satisfied that the recovery plan meets the requirements in section 138(2) or (3)
a: the Bank may require the licensed insurer to amend the plan and to resubmit the plan to the Bank for approval within any reasonable time that the Bank may specify; and
b: the licensed insurer must comply with those requirements.
140: Licensed insurer must comply with recovery plan
The licensed insurer must, after the recovery plan has been approved by the Bank, take all practicable steps to comply with the plan.
141: Amendments to recovery plan
1: A licensed insurer may amend its recovery plan only with the Bank's approval.
2: If, at any time, the Bank is no longer satisfied that the recovery plan meets the requirements in section 138(2) or (3)
a: the Bank may, by written notice given to the licensed insurer, require the licensed insurer to amend the plan in the manner specified by the Bank and to resubmit the plan to the Bank for approval within any reasonable time that the Bank may specify; and
b: the licensed insurer must comply with those requirements.
142: Offence to fail to comply with recovery plan requirements
A licensed insurer commits an offence if it fails to comply with any of sections 138 to 141 Section 142 amended 1 July 2013 section 413 Criminal Procedure Act 2011
2: Directions to licensed insurers and associated persons
143: Bank may give directions to licensed insurer
1: The Bank may give a licensed insurer a direction, in writing, if it has reasonable grounds to believe that 1 or more of the following apply:
a: the insurer has failed, is failing, or is likely to fail to maintain a solvency margin:
b: the business of the insurer has not been, or is not being, conducted in a prudent manner:
c: the insurer, or a director or relevant officer of the insurer, has failed, is failing, or is likely to fail to comply with any direction, condition, or other requirement imposed by or under this Act or the regulations:
d: the governance structure of the insurer has changed, since its licence was issued, in a manner that significantly reduces the extent to which it is appropriate (having regard to the matters specified in section 19(1)﻿(i)
e: the insurer is an overseas insurer and an overseas supervisor has taken, or is taking, regulatory action against the insurer (whether or not that action has been completed):
f: the insurer is an overseas insurer and the law, requirements, or supervision referred to in section 19(1)﻿(j)
2: The Bank must, before giving a direction under subsection (1) to a licensed insurer, consider whether, in the circumstances, it would be more appropriate to give a direction to the insurer to prepare a recovery plan under subpart 1
3: In this section, regulatory action
a: action to cancel or suspend the licence, registration, or other authorisation of the insurer to act as an insurer (or action equivalent to cancelling or suspending such a licence, registration, or authorisation); or
b: a direction to the insurer to the effect of 1 or more of the following:
i: to take specified action to improve its solvency:
ii: to cease to enter into new contracts of insurance:
iii: to carry on its business, or any part of its business, in accordance with the direction:
iv: to cease to carry on its business, or any part of its business, in accordance with the direction; or
c: removing or replacing any directors or relevant officers of the insurer (whether by means of a direction or otherwise); or
d: civil or criminal proceedings against the insurer.
144: Scope of directions to licensed insurer
1: A direction given under section 143
a: consult with the Bank, at the times and in the manner specified by the Bank, about the circumstances of the insurer and the actions or proposed actions of the insurer in respect of resolving any difficulties facing the insurer:
b: cease entering into any new contracts of insurance:
c: carry on its business, or any part of its business, in accordance with the direction:
d: cease to carry on its business, or any part of its business, in accordance with the direction:
e: take the action that is specified in the direction to address a failure, or potential failure, to comply with any direction, condition, or other requirement imposed by or under this Act or the regulations:
f: ensure that any officer or employee of the insurer ceases to take part in the management or conduct of its business except with the permission of the Bank and so far as that permission extends:
g: take the action that is specified in the direction to address any circumstances of financial difficulties.
2: However, a direction must not require the licensed insurer to cease to enter into contracts of insurance by way of renewal of contracts of insurance that were originally entered into before the direction was given.
145: Bank may give directions to associated person
The Bank may give an associated person of a licensed insurer a written direction if it has reasonable grounds to believe that 1 or more of the following apply:
a: the associated person, or a director or the chief executive officer of the associated person, has failed, is failing, or is likely to fail to comply with any direction or other requirement imposed by or under this Act or the regulations:
b: the circumstances of the associated person are such as to be prejudicial to the solvency of the insurer or its ability to comply with this Act or the regulations:
c: the affairs of the associated person are being conducted in a manner prejudicial to the solvency of the insurer or its ability to comply with this Act or the regulations.
146: Scope of directions to associated person
A direction given under section 145
a: consult with the Bank, at the times and in the manner specified by the Bank, about the circumstances of the associated person and the actions or proposed actions of the associated person in respect of resolving any difficulties facing the associated person:
b: take the action that is specified in the direction to address a failure, or potential failure, to comply with any direction or other requirement imposed by or under this Act or the regulations:
c: ensure that any officer or employee of the associated person ceases to take part in the management or conduct of its business except with the permission of the Bank and so far as that permission extends:
d: take the action that is specified in the direction to address any circumstances of financial difficulties.
147: Miscellaneous matters relating to directions
1: A direction given under this subpart must state the grounds on which it is given.
2: The Bank may—
a: amend or modify a direction; or
b: replace a direction with another direction; or
c: revoke a direction.
148: Offence to contravene directions
1: A licensed insurer, or an associated person of a licensed insurer, that fails to comply with a direction under this subpart commits an offence.
2: Every person commits an offence who, being an officer or employee of a licensed insurer or of an associated person of a licensed insurer, obstructs, hinders, or prevents the insurer or associated person from giving effect to a direction under this subpart.
3: Every person who commits an offence under this section is liable on
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
b: in the case of a body corporate, to a fine not exceeding $500,000. Section 148(3) amended 1 July 2013 section 413 Criminal Procedure Act 2011
149: Power to remove, replace, or appoint directors, auditor, or actuary
1: This section applies if the Bank has reasonable grounds to believe that—
a: any of the circumstances referred to in section 143(1) 145
b: it is necessary to—
i: remove or replace a director, an auditor, or the appointed actuary of a licensed insurer or of an associated person of a licensed insurer; or
ii: appoint a person as a director, an auditor, or the appointed actuary of a licensed insurer or of an associated person of a licensed insurer.
2: If this section applies, the Bank may—
a: remove or replace a director, an auditor, or the appointed actuary of a licensed insurer or of an associated person of a licensed insurer; or
b: appoint a person as a director, an auditor, or the appointed actuary of a licensed insurer or of an associated person of a licensed insurer.
3: The Bank must—
a: exercise a power referred to in subsection (2) by giving notice in writing to—
i: the director, auditor, or actuary concerned, or the person being appointed; and
ii: in the case of the removal, replacement, or appointment of a director, the Registrar of Companies; and
b: give notice in writing of the exercise of that power to the licensed insurer or associated person.
4: A notice given under subsection (3)﻿(a)﻿(ii) is sufficient compliance with section 159 section 152
5: This section does not apply in respect of a director of an overseas person.
6: This section has effect despite any enactment, rule of law, or the terms of the constitution of a licensed insurer or an associated person of a licensed insurer.
150: Offence to disclose giving of direction or notice
1: Every person commits an offence who discloses that a direction has been given under subpart 1 section 149
2: Nothing in subsection (1) applies to the disclosure or publication of the fact that a direction or notice has been given if the disclosure or publication is made—
a: to any director, relevant officer, or professional or financial adviser of the licensed insurer or associated person of a licensed insurer to which the direction or notice relates:
b: with the written consent of the Bank, for the purposes of the sale or other disposition, or the possible sale or other disposition, of the whole or any part of the capital, or business undertaking, of the licensed insurer or associated person of a licensed insurer:
c: by, or on behalf of, the Bank or with the written consent of the Bank,—
i: to the public or any class of the public; or
ii: to any person who has a proper interest in knowing that the direction or notice has been given.
3: For the purposes of subsection (2)﻿(b) and (c),—
a: the Bank's consent must not be unreasonably withheld; and
b: in considering whether to give its consent, the Bank must take into account the time that has elapsed since the direction or notice was given.
4: Nothing in subsection (1) applies to the disclosure or publication of the fact that a direction has been given requiring the actions set out in section 144(1)﻿(f) 146(c)
5: Every person who commits an offence under this section is liable on
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
b: in the case of a body corporate, to a fine not exceeding $500,000. Section 150(5) amended 1 July 2013 section 413 Criminal Procedure Act 2011
3: Liquidation or voluntary administration of licensed insurers
Bank may apply to put insurer into liquidation or voluntary administration, or apply for reduction of value of contracts of insurance
151: Bank may apply for liquidation of insurers
1: The Bank may, in the case of a licensed insurer that may be put into liquidation under or in accordance with the Companies Act 1993
2: The High Court may, on an application under subsection (1), appoint a liquidator for the licensed insurer if it is satisfied that—
a: the insurer is unable to pay its debts (and, for that purpose, section 287
b: the insurer is failing to maintain a solvency margin; or
c: the insurer has persistently or seriously failed to comply with any direction, condition, or other requirement imposed by or under this Act or the regulations; or
d: it is just and equitable that the insurer be put into liquidation.
3: The High Court may, on the application of the Bank, appoint a liquidator for a body corporate that may be put into liquidation under or in accordance with the Companies Act 1993 section 15
4: Subsection (3) does not limit subsections (1) and (2).
5: Nothing in this section limits or affects any other enactment that provides for the winding up, liquidation, or dissolution of any body corporate or any class of body corporate.
152: Bank may apply for High Court to reduce value of contracts of insurance
1: The High Court may, on the application of the Bank, reduce the value of 1 or more of a licensed insurer’s contracts of insurance if it is satisfied that 1 or more of the grounds specified in section 151(2)﻿(a) to (d)
2: The High Court may order a reduction under this section on the terms and subject to the conditions (if any) that it thinks fit.
3: The High Court may, for the purposes of this section, order the Bank to arrange for an independent actuary to prepare a report on the matters that the court thinks fit.
153: Bank may apply for voluntary administration of licensed insurers
The Bank may apply under section 239L Bank's approval for voluntary liquidation or appointment of administrator by company
154: Bank's approval for voluntary liquidation or appointment of administrator by company
1: A liquidator may not be appointed under section 241(2)﻿(a) or (b)
a: a copy of the draft special resolution that is proposed for the purposes of section 241(2)﻿(a)
b: the Bank has given its written approval to the appointment.
2: An administrator may not be appointed under section 239I
a: a copy of the draft resolution that is proposed for the purposes of that section is given to the Bank before the appointment is made; and
b: the Bank has given its written approval to the appointment.
3: An appointment made in breach of subsection (1) or (2) is not valid.
4: A request for the Bank to give its approval under this section must—
a: be made in the manner that is specified by the Bank; and
b: be accompanied by the prescribed fee (if any).
5: A person that makes a request must provide to the Bank the information that is required by the Bank to assist it in determining whether to give its approval. Bank's participation in insolvency procedures and certain other proceedings
155: Bank may make certain applications in respect of voluntary administration or liquidation and appear and be heard in proceedings
1: If any person other than the Bank makes an application to the High Court to appoint a liquidator for a licensed insurer or otherwise for the winding up or dissolution of a licensed insurer or for the appointment of an administrator for a licensed insurer, the Bank may appear and be heard in relation to the application.
2: If a licensed insurer is in voluntary administration, is subject to a deed of company arrangement, or is in liquidation under the Companies Act 1993
a: the Bank may make an application under any of sections 239R 239AM 239ACJ 239ACL 239ACX 239ADB 239ADD 239ADO to 239ADQ 239ADS to 239ADV 239AER 239AEU 245A 250 271 283(4) 284 286
b: the Bank may appear and be heard in relation to an application made by any other person under any of those sections in respect of the insurer.
3: If a person makes an application under section 239ADR
156: Bank's participation in arrangements, amalgamations, and compromises under Companies Act 1993
1: If a compromise under section 228(1) section 229(2)
2: A licensed insurer that fails to comply with subsection (1) commits an offence and is liable, on
3: If a person makes an application under section 232 233 236 Section 156(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
157: Bank must be sent copy of applications under Parts 14 to 16 of Companies Act 1993
1: If a person (other than the Bank) makes an application to the High Court under any provision of Parts 14 to 16
a: the insurer (unless it is in voluntary administration or liquidation or is subject to a deed of company arrangement):
b: if the insurer is in voluntary administration or liquidation or subject to a deed of company arrangement, the administrator, liquidator, or deed administrator (as the case may be):
c: the Registrar of the High Court in which the application is made.
2: A licensed insurer commits an offence if it fails to comply with subsection (1) and is liable, on Section 157(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
158: Bank must be sent copies of certain documents and may inspect certain accounts and records
1: If a person is required to prepare a specified document in respect of a licensed insurer under any of sections 239AH 239AMC(3) 239ACP(1)﻿(a) 239ACZ 239ADY(a) and (c) 239ADZ 239AEA 245D(3) 257(1)﻿(a)﻿(i) and (ii) and (c)
2: In subsection (1),— prepare specified document
3: The Bank may inspect any accounts or records kept by a liquidator of a licensed insurer under section 256(1)﻿(a) Section 158(1) amended 1 September 2020 section 58 Insolvency Practitioners Regulation (Amendments) Act 2019
159: Attendance of representative of Bank at certain meetings for licensed insurer in voluntary administration, subject to deed of company arrangement, or in liquidation
1: This section applies in respect of a licensed insurer that is—
a: in voluntary administration; or
b: subject to a deed of company arrangement; or
c: in liquidation under the Companies Act 1993
2: The convenor of a specified meeting in respect of a licensed insurer must ensure that—
a: the Bank receives the notices and communications relating to the meeting that a person who is entitled to attend the meeting is entitled to receive; and
b: a representative of the Bank—
i: is permitted to attend the meeting; and
ii: may be heard at the meeting.
3: In this section,— convenor specified meeting
a: means a meeting convened, called, or summoned under any of the provisions of section 239T Part 15A sections 239ADF 243 244 258(2)﻿(b) and (d) 314 315
b: includes—
i: a meeting of a creditors' committee (within the meaning of section 239AR
ii: a meeting called as a result of a requirement under section 160
160: Bank may require meeting of creditors or shareholders to appoint liquidation committee
1: This section applies in respect of a licensed insurer that is in liquidation under the Companies Act 1993
2: At any time in the course of the liquidation, the Bank may, by notice in writing to the liquidator, require the liquidator to call a meeting of creditors or shareholders—
a: to vote on a proposal that a liquidation committee for the purposes of section 315
b: if it is so decided, to choose the members of the committee.
3: The liquidator must comply with the requirement and section 314(4) to (6) Special insolvency provisions for insurers
161: High Court may reduce value of contracts of insurance
1: If an application has been made to the High Court to appoint a liquidator or an administrator for a licensed insurer, the court may, if it thinks fit, reduce the value of 1 or more of the insurer’s contracts of insurance instead of appointing the liquidator or administrator.
2: The High Court may if it thinks fit, on the application of a liquidator or an administrator of a licensed insurer, reduce the value of 1 or more of the insurer’s contracts of insurance.
3: The High Court may order a reduction under this section on the terms and subject to the conditions (if any) that it thinks fit.
4: A liquidator or an administrator who makes an application under subsection (2) must provide a copy of the application to the Bank as soon as practicable after it is filed.
5: The Bank is entitled to attend and be heard in any proceedings under this section.
162: High Court may require actuarial report
1: The High Court may, for the purposes of section 161
2: The person that arranges for an independent actuary to prepare the report must ensure that a copy is provided to the Bank as soon as practicable after it is prepared.
163: Continuation of life policies if insurer in liquidation
1: This section applies in relation to the liquidation of a life insurer under the Companies Act 1993
2: The liquidator must carry on the life insurer’s business so far as it consists of continuing the insurer’s life policies with a view to that part of the business being transferred as a going concern to a person who may lawfully continue those life policies.
3: Subsection (2) applies unless the High Court orders otherwise.
4: In continuing the business, the liquidator—
a: may agree to the variation of any life policies in existence when the liquidator is appointed; but
b: must not enter into any new life policies.
5: The High Court may, on the application of the Bank or a liquidator, appoint an independent actuary to investigate the life insurer’s business so far as it consists of continuing its life policies and to report to the Bank and liquidator—
a: on the desirability or otherwise of that part of the insurer’s business being continued; and
b: on any reduction in the life policies effected by the insurer that may be necessary for the successful continuation of that part of the insurer’s business.
6: Nothing in Schedule 6
164: Liquidator or deed administrator may apply to High Court for approval of scheme of transfer of insurance business
1: The liquidator or deed administrator of a licensed insurer may apply to the High Court for approval of a scheme under which all or part of the insurer's insurance business is transferred to another person (the transferee
2: An application under subsection (1) must contain, or be accompanied by, a scheme for the proposed transfer that sets out—
a: the contracts of insurance in respect of which liability is to be assumed by the transferee (including a description of each class of contract that is sufficient to identify it, and the amount of the liability in respect of each class); and
b: the assets that are to be transferred to the transferee in consideration for the assumption of that liability; and
c: the net value of those assets; and
d: the terms of the agreement or deed under which the proposed transfer is to be carried out; and
e: particulars of any other arrangements necessary to give effect to the scheme.
3: The following reports must be provided to the High Court in respect of an application under subsection (1):
a: a report on the scheme prepared by the Bank that contains the matters required by the High Court and any other matters that the Bank thinks fit; and
b: an independent actuary's report on the scheme obtained by the Bank that contains the matters required by the High Court and any other matters that the Bank thinks fit.
4: The licensed insurer is liable to pay to the Bank the costs incurred by the Bank in obtaining the actuary's report under subsection (3)﻿(b) (and the amount payable is recoverable as a debt due to the Bank in any court of competent jurisdiction).
165: Right to attend and be heard
1: If an application is made under section 164
a: the Bank:
b: the transferee:
c: the person appointed by the High Court to represent the policyholders of the licensed insurer or any class of those policyholders:
d: the person appointed by the High Court to represent the shareholders or members of the licensed insurer or any class of those shareholders or members:
e: the person appointed by the High Court to represent the creditors of the licensed insurer or any class of those creditors.
2: The following persons are entitled to appear and be heard on the application:
a: each person to whom notice of the application has been sent under subsection (1):
b: with the leave of the High Court, any other person who appears to the court to have a sufficient interest in the application.
3: In respect of a proceeding or intended proceeding under section 164
166: Approval of scheme
1: The High Court may—
a: approve the scheme without modification; or
b: approve the scheme subject to the modifications that it thinks fit (subject to the agreement of the liquidator or deed administrator, the Bank, and the transferee); or
c: refuse to approve the scheme.
2: In deciding whether to approve a scheme (with or without modifications), the High Court must have regard to—
a: the interests of the policyholders, shareholders or members, and creditors of the licensed insurer who are affected by the scheme; and
b: the reports referred to in section 164(3)
c: any other matter the court considers relevant.
167: Effect of approval
When a scheme is approved under section 166
a: it becomes binding on all persons; and
b: it has effect in spite of anything in the constitution of any licensed insurer affected by the scheme; and
c: the liquidator or deed administrator must send a copy of the scheme to the Bank.
168: Application by Bank for directions to liquidator, administrator, or deed administrator
1: The Bank may apply to the High Court for the court to give directions to the liquidator, administrator, or deed administrator of a licensed insurer relating to the performance or exercise of any of the liquidator's, administrator's, or deed administrator's functions or powers.
2: On an application under subsection (1), the High Court may give directions concerning the performance or exercise of any of the liquidator's, administrator's, or deed administrator's functions or powers, and every person is bound by those directions.
3: The liquidator, administrator, or deed administrator is entitled to appear and be heard on the application.
169: Valuation of policies by liquidator or deed administrator
1: The liquidator of a licensed insurer must determine the amount of the liability of the insurer to each policyholder under each contract of insurance entered into in New Zealand by the insurer in the manner and on the basis that the liquidator decides.
2: A deed administrator of a licensed insurer may determine the amount of the liability of the insurer to each policyholder under each contract of insurance entered into in New Zealand by the insurer in the manner and on the basis that the deed administrator decides.
3: The liquidator or deed administrator (if the deed administrator acts under subsection (2)) must give to each policyholder notice in writing of the amount of the liability under the policyholder's contract of insurance as determined under subsection (1) or (2).
4: The amount of the liability of the licensed insurer, as determined by the liquidator or deed administrator under subsection (1) or (2), is binding upon each policyholder to whom notice is given under subsection (3), unless, within 2 months after the date the notice was given, that person appeals to the High Court against the liquidator's or deed administrator's determination.
5: On an appeal to the High Court against the liquidator's or deed administrator's determination, the High Court may confirm, reverse, or modify the determination appealed against and may make any other order that it thinks fit.
4: Statutory management
Commencement of statutory management
170: Statutory management of licensed insurers and associated persons
1: The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank,—
a: declare that a licensed insurer is subject to statutory management; and
b: declare that an associated person of a licensed insurer is subject to statutory management; and
c: appoint 1 or more persons as statutory manager or statutory managers of the licensed insurer or associated person for a specified period.
2: If an Order in Council is made under subsection (1),—
a: every subsidiary of a licensed insurer declared to be subject to statutory management, except any subsidiary declared to be a subsidiary to which the order does not apply, is subject to statutory management; and
b: the appointment of a statutory manager for the specified period in respect of the licensed insurer also applies to those subsidiaries.
3: If a licensed insurer acquires a subsidiary after it has been declared to be subject to statutory management under subsection (1), the subsidiary is not subject to statutory management unless a further Order in Council is made declaring the subsidiary to be subject to statutory management.
4: Subsections (1)﻿(b) and (2) are subject to section 139J(4) Banking (Prudential Supervision) Act 1989
5: An order under this section is secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives, unless it relates exclusively to an individual (in which case a transitional exemption applies under Schedule 1 LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 170(4) inserted 10 December 2013 section 12 Reserve Bank of New Zealand (Covered Bonds) Amendment Act 2013 Section 170(4) amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 170(5) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
171: Statutory management of overseas persons
If a licensed insurer or an associated person of a licensed insurer that is declared to be subject to statutory management, or a subsidiary of a licensed insurer that becomes subject to statutory management under section 170(2) or (3)
172: Date and time of appointment
1: Every Order in Council made under section 170(1)
2: The date and time as specified must not be earlier than the date on which, and the time at which, the Order in Council is made.
3: If a question arises as to whether, on the date on which a statutory manager was appointed, an act was done or a transaction was entered into or effected before or after the appointment, the act or transaction must, in the absence of proof to the contrary, be treated as having been done, entered into, or effected, as the case may be, after the appointment of the statutory manager.
173: Grounds on which licensed insurer may be declared to be subject to statutory management
1: The Bank may make a recommendation under section 170
a: 1 or more of the circumstances specified in section 143(1)﻿(a) to (f)
b: the insurer is, or may be, operating fraudulently or recklessly, and that it is desirable that the insurer be declared to be subject to statutory management for the purpose of—
i: limiting or preventing the risk of further deterioration of the financial affairs of the insurer; or
ii: limiting or preventing the carrying out, or the effects, of any fraudulent act or activity; or
iii: enabling the affairs of the insurer to be dealt with in a more orderly or expeditious way.
2: However, the Bank must not make a recommendation under section 170 Companies Act 1993
174: Grounds on which associated person may be declared to be subject to statutory management
1: The Bank may make a recommendation under section 170
a: 1 or more of the circumstances specified in section 145(a) to (c)
b: the business and affairs of the licensed insurer are so closely connected with the associated person that a statutory manager would be unable to exercise effectively the powers conferred by this subpart in relation to the insurer unless the statutory manager is also appointed as statutory manager of the associated person; or
c: the associated person is, or may be, operating fraudulently or recklessly in a manner prejudicial to the solvency of the insurer or its ability to comply with this Act or the regulations, and that it is desirable that the person be declared to be subject to statutory management for the purpose of—
i: limiting or preventing the risk of further deterioration of the financial affairs of the person; or
ii: limiting or preventing the carrying out, or the effects, of any fraudulent act or activity; or
iii: enabling the affairs of the person to be dealt with in a more orderly or expeditious way.
2: However, the Bank must not make a recommendation under section 170 Companies Act 1993
3: If an associated person of a licensed insurer is also a licensed insurer, the Bank may make a recommendation under section 170 section 173
4: Section 173
175: Bank must give notice of recommendation
The Bank must, as soon as practicable after the making of an Order in Council under section 170
176: Application of this subpart to joint statutory managers, associated persons, and subsidiaries
1: If an Order in Council is made under section 170
2: For the purposes of this subpart, unless the context otherwise requires,—
a: references to a statutory manager, if 2 or more persons are appointed as statutory managers, include references to those statutory managers:
b: if an associated person of a licensed insurer is declared to be subject to statutory management, or a subsidiary of a licensed insurer becomes subject to statutory management under section 170(2) or (3)
i: references to a licensed insurer in this subpart must be read as including references to the associated person or subsidiary, as the case may be; and
ii: references to a corporation in the provisions of the Corporations (Investigation and Management) Act 1989 section 180
177: Continuation of statutory management of companies restored to New Zealand register
1: This section applies to a licensed insurer, an associated person of a licensed insurer, or a subsidiary of a licensed insurer that has been removed from the New Zealand register under section 317
2: If a person to whom this section applies is restored to the New Zealand register under section 328 Exercise of powers
178: Considerations affecting exercise of powers by statutory manager
1: In exercising the powers conferred by this subpart, a statutory manager of a licensed insurer must have regard to—
a: the purposes of this Act; and
b: the principles set out in section 4
c: the advice of the Bank.
2: Every statutory manager must—
a: consult with the Bank, to the extent required by the Bank, as to the exercise of those powers:
b: provide the reports that the Bank may require as to the state of the affairs, business, and statutory management of the licensed insurer to persons specified by the Bank (including, but not limited to, the Bank) in the form and with the frequency that the Bank may require.
3: The powers conferred by this subpart on a statutory manager of a life insurer are subject to the requirements of subpart 3
179: Statutory manager to comply with directions of Bank
1: Every statutory manager of a licensed insurer must comply with any directions given in writing by the Bank relating to the exercise of the powers of the statutory manager under this subpart.
2: This section is subject to section 58 section 180 Application of Corporations (Investigation and Management) Act 1989
180: Application of Corporations (Investigation and Management) Act 1989
The following provisions of the Corporations (Investigation and Management) Act 1989
a: section 42
b: section 43
i: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
ii: in the case of a body corporate, to a fine not exceeding $500,000:
c: section 44
d: section 45
e: section 46
f: section 47
g: section 48
h: section 49
i: sections 50(1) and (2) 51 53 72
j: section 52
k: section 54
l: section 55
m: section 57
n: section 58
o: section 59
p: section 60
q: section 61
r: section 64
s: section 65
t: section 66
u: sections 67 68
v: section 69
w: sections 71 71A Section 180(b) amended 1 July 2013 section 413 Criminal Procedure Act 2011
181: Act does not limit application of Corporations (Investigation and Management) Act 1989
1: Nothing in this Act limits the Corporations (Investigation and Management) Act 1989
2: In particular, a licensed insurer (or an associated person of a licensed insurer) may be declared to be subject to statutory management, or subject to the exercise of any other powers, under that Act. Power to obtain documents and information
182: Powers to obtain documents and information
A statutory manager has, and may exercise, all of the powers conferred on a liquidator of a company by sections 261 to 267 section 373(3) Sales and dispositions
183: Sale requires Bank's approval
The statutory manager may not sell or otherwise dispose of the following unless the statutory manager has consulted with the Bank and the Bank, with the consent of the Minister, has given approval in writing to the sale or other disposition and the terms and conditions of it:
a: the whole or any substantial part of the business undertaking of a licensed insurer under section 50(1) section 180
b: any of the shares of a body corporate formed and registered under section 50(2)﻿(a) section 180
c: the whole or any substantial part of the business undertaking of a body corporate formed and registered under section 50(2)﻿(a) of that Act (as applied by section 180
184: Consents not required under other enactments
The provisions of any enactment or agreement requiring any consent, licence, permission, clearance, or other authority do not apply in respect of the following (being a sale or disposition to which the Bank has, with the consent of the Minister, given its approval under section 183
a: the sale or other disposition of the whole or any part of the business undertaking of a licensed insurer under section 50(1) section 180
b: the sale or other disposition under section 50(2)﻿(e) of that Act (as applied by section 180
i: any of the shares of a body corporate formed and registered under section 50(2)﻿(a) of that Act; or
ii: the whole or any part of the business undertaking of that body corporate. Body corporate may be formed to acquire branch of overseas person
185: Statutory manager may form body corporate to acquire business of branch of overseas person
1: If a licensed insurer that is an overseas person is declared to be subject to statutory management, the statutory manager may—
a: form and register a body corporate under the Companies Act 1993
b: subscribe for or acquire, as trustee for the overseas person, all or any of the shares of the body corporate:
c: allot or issue all or any of the shares in the body corporate as fully or partly paid, as the case may be, up to the value of any property, rights, and assets vested in the body corporate under subsection (2) (after deducting the value of any liabilities so vested).
2: The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, declare that the whole or any part of any property, rights, assets, and liabilities of the overseas insurer relating to its New Zealand business will vest in the body corporate referred to in subsection (1)﻿(a) on a date specified in the order (and the property, rights, assets, and liabilities vest in the body corporate on the date specified).
3: Nothing in subsection (2) reduces, extinguishes, or affects any obligation or liability of an overseas person.
4: Every body corporate referred to in subsection (1)﻿(a) is, for the purposes of this subpart, deemed to be a licensed insurer subject to statutory management as if the body corporate had been declared to be subject to statutory management under this subpart.
5: The statutory manager in respect of the overseas person is the statutory manager of the body corporate referred to in subsection (1)﻿(a) as if the statutory manager had been appointed under section 170
6: An order under this section is secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 185(6) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
186: Vesting of property subject to security
1: An order may be made under section 185
2: Any property, rights, or assets that are declared to vest under an order made under section 185
187: Proof of vesting
1: No registrar is obliged solely by reason of section 185
2: The presentation to any registrar or other person of any instrument, whether or not comprising an instrument of transfer, by the body corporate is, in the absence of evidence to the contrary, sufficient proof that the property is vested in the body corporate if the instrument—
a: is executed or purports to be executed by the body corporate; and
b: relates to any property held by the overseas person before the date specified in an Order in Council made under section 185
c: contains a statement that the property has become vested in the body corporate by virtue of the provisions of that section.
3: In this section, registrar
188: Provisions applying if liabilities included in sale
If all or any part of any liability of a body corporate formed and registered under section 185(1) section 50 section 180 section 53(a) Obligations incurred by statutory manager
189: Obligations incurred by statutory manager
1: Any obligations incurred by a statutory manager of a licensed insurer in the course of his or her duties as statutory manager are incurred by that statutory manager on behalf of the insurer, and the statutory manager does not incur personal liability for those obligations.
2: In the winding up or liquidation of a licensed insurer, an associated person of a licensed insurer, or a subsidiary of a licensed insurer, all amounts required to satisfy obligations incurred by the statutory manager on behalf of the insurer, associated person, or subsidiary must be paid in priority to all other debts. Value of contracts of insurance
190: Statutory manager may value contracts of insurance
1: The statutory manager of a licensed insurer may determine the amount of the liability of the insurer to each policyholder under each contract of insurance entered into in New Zealand by the insurer in the manner and on the basis that the statutory manager decides.
2: The statutory manager must give to each policyholder notice in writing of the amount of the liability of the insurer under the policyholder's contract of insurance as determined under subsection (1).
3: The amount of the liability of the licensed insurer, as determined by the statutory manager under subsection (1), is binding upon each policyholder to whom notice is given under subsection (2).
191: Value of contracts of insurance may be reduced by Order in Council
1: This section applies to a licensed insurer that is in statutory management.
2: The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, reduce the value of 1 or more of the licensed insurer’s contracts of insurance.
3: The Order in Council may provide for the reduction to be on the terms and subject to the conditions (if any) that are specified in the order.
4: An order under subsection (2) is secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 191(4) inserted 28 October 2021 section 3 Secondary Legislation Act 2021 Auditor, actuary, and annual financial statements and records
192: Appointment of auditor and actuary
1: The statutory manager of a licensed insurer must appoint 1 or more persons (whether as individuals or as the members of any firm or firms) to be the auditor of the insurer
1A: The person or persons appointed to be the auditor under subsection (1) must be—
a: licensed auditors (within the meaning of section 6(1)
b: approved by the Bank.
2: The statutory manager of a licensed insurer must appoint a person to be the appointed actuary of the insurer, being a person who has been approved by the Bank.
3: Every appointment must be for a term not exceeding 2 years, but any person appointed as auditor or actuary continues in office until a successor comes into office.
4: A person appointed as auditor or actuary is eligible for reappointment.
5: The auditor or actuary must be paid the fees that are fixed by the statutory manager with the approval of the Bank.
6: Every auditor and every actuary has a right of access at all times to the books and papers of the licensed insurer, and is entitled to require from its officers and employees the information and explanations that the auditor or actuary thinks necessary for the performance of the auditor's or actuary's duties (as the case may be). Section 192(1) amended 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 192(1A) inserted 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013
193: Prior auditor or actuary ceases to hold office
A person holding office as auditor or appointed actuary of a licensed insurer at the time that it is declared to be subject to statutory management ceases to hold that office but may be appointed under section 192
194: Removal of auditor or actuary
1: An auditor or actuary appointed under section 192
2: The notice must be published in the Gazette
195: Annual financial statements
1: The statutory manager of a licensed insurer must, within 3 months after the end of each financial year or a later date that is approved by the Bank, prepare the following statements showing the financial position of the licensed insurer and its subsidiaries at the end of that year and the results of their trading for that year:
a: a statement of financial position and statement of financial performance of the insurer; and
b: a consolidated statement of financial position and consolidated statement of financial performance of the insurer and its subsidiaries.
2: The financial statements must be—
a: signed by the statutory manager; and
b: audited and reported on by the auditor.
196: Annual report by statutory manager
1: The statutory manager of a licensed insurer must, after the end of each financial year, prepare a report on the conduct of the management and the affairs of the licensed insurer and its subsidiaries.
2: The report, together with the financial statements and the auditor's report on them, must be submitted to the Minister and the Bank within 7 days after the completion of the auditor's report.
3: The report, financial statements, and the auditor's report on them must within 14 days after submission to the Minister be filed,—
a: in the case of a licensed insurer that is a company, with the Registrar of Companies:
b: in the case of any other body corporate, with the person exercising functions corresponding with those of the Registrar of Companies. Termination of statutory management
197: Termination of statutory management by Order in Council
1: The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, declare that 1 or more of the following persons who are subject to statutory management cease to be subject to statutory management:
a: a licensed insurer:
b: an associated person of a licensed insurer:
c: a subsidiary of a licensed insurer.
2: A person who is likely to be affected by the making of an Order in Council under section 170
3: If an Order in Council is made under subsection (1) declaring that a licensed insurer ceases to be subject to statutory management,—
a: every subsidiary of the insurer, except any subsidiary specified in the order, ceases to be subject to statutory management on the same date as that specified as the date on which, and at the same time as that specified as the time at which, the insurer ceases to be subject to statutory management:
b: the appointment of any person appointed as a statutory manager of every such subsidiary terminates on the date and at the time referred to in paragraph (a).
4: An order under subsection (1) is secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives, unless it relates exclusively to an individual (in which case a transitional exemption applies under Schedule 1 LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 197(4) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
198: Termination of statutory management on liquidation
A licensed insurer, an associated person of a licensed insurer, or a subsidiary of a licensed insurer ceases to be subject to statutory management if the insurer, associated person, or subsidiary, as the case may be, is put into liquidation on the application of the statutory manager.
199: Time of termination
1: If an Order in Council is made under section 197
a: the person ceases to be subject to statutory management at the specified time; and
b: the appointment of any statutory manager appointed in respect of the person terminates at the specified time.
2: In this section, specified time
a: if an Order in Council is made under section 197
b: if a liquidator is appointed, the date and time of the liquidator's appointment.
5: Miscellaneous provisions
Provisions relating to Lloyd's
200: Lloyd's underwriters must not carry on insurance business in New Zealand unless Lloyd's holds licence
1: A Lloyd's underwriter must not carry on business in New Zealand that involves entering into contracts of insurance as an insurer with New Zealand policyholders unless Lloyd's holds a licence issued under section 203 205
2: A Lloyd's underwriter who fails to comply with subsection (1) commits an offence and is liable, on Section 200(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
201: Lloyd's may apply for licence on behalf of underwriting members
1: Lloyd's may apply for a licence in respect of the insurance business carried on by Lloyd's underwriters.
2: Lloyd's application must be—
a: made in the manner that is specified by the Bank; and
b: accompanied by payment of the prescribed fee for the application (if any).
3: Lloyd's must provide to the Bank the information that is required by the Bank to assist it in determining the application.
4: Lloyd's commits an offence if it provides false or misleading information to the Bank for the purposes of the application and is liable, on Section 201(4) amended 1 July 2013 section 413 Criminal Procedure Act 2011
202: Lloyd's fit and proper policy and risk management programme
1: Lloyd's must provide the following to the Bank with its application:
a: a copy of a written policy that complies with subsection (2) (the Lloyd's fit and proper policy
b: a copy of a risk management programme that is relevant to the Lloyd's market (the Lloyd's risk management programme
2: The Lloyd's fit and proper policy must—
a: govern the requirements and other criteria that a person must have or satisfy in order to be, and continue to be, a Lloyd's underwriter, being a policy for the purpose of ensuring that only fit and proper persons are, and continue to be, Lloyd's underwriters; and
b: comply with the prescribed requirements.
203: Bank must issue temporary licence to Lloyd's pending consideration of its application
1: The Bank must issue a temporary licence to Lloyd's if—
a: Lloyd's has, within 18 months after the date on which this Act receives the Royal assent, made, or purported to make, an application under section 201
b: Lloyd's has taken reasonable steps to—
i: provide a fit and proper policy that complies with section 202(2)
ii: provide a risk management programme; and
iii: otherwise make the application under section 201
2: The licence under subsection (1) remains in force until the earliest of the following:
a: the issue of a licence under section 205
b: the date that the licence is cancelled under section 207(4)
c: the date that is 3 years after the date on which this Act receives the Royal assent.
204: Lloyd's underwriters may carry on insurance business in New Zealand if Lloyd's holds licence
1: If Lloyd's holds a licence issued under section 203 205 section 200
2: Every Lloyd's underwriter that carries on insurance business referred to in section 200 section 203 205
a: sections 44 to 72
b: subpart 3
c: Parts 3 4
3: Despite subsection (2), in the case of a licence issued under section 203
4: Despite subsection (2), in the case of a licence issued under section 205
5: Subsection (4) is subject to section 232
205: Issue of licence to Lloyd's
1: Lloyd's is entitled to be issued with a licence if the Bank is satisfied that—
a: every relevant Lloyd's underwriter has the ability to comply with subpart 2
b: in the case of relevant Lloyd's underwriters who carry on, or propose to carry on, business as life insurers, those Lloyd's underwriters have the ability to comply with subpart 3
c: Lloyd's has the ability to comply with section 207
d: the Lloyd's fit and proper policy is satisfactory; and
e: the Lloyd's risk management programme is satisfactory (having regard to the requirements of section 73(2)
f: the nature and extent of prudential supervision by the FSA that applies to Lloyd's and the relevant Lloyd's underwriters is appropriate, having regard to whether it is, in terms of achieving the purposes of this Act, at least as satisfactory as the nature and extent of prudential supervision that applies to insurers incorporated in New Zealand; and
g: Lloyd's and every relevant Lloyd's underwriter comply with any other prescribed requirements.
2: The Bank must, after it has made a decision on the application by Lloyd's for a licence, give written notice of the decision to Lloyd's.
3: If the Bank refuses to issue a licence, the notice must contain, or be accompanied by, a statement of the Bank's reasons for the refusal.
4: The Bank must give notice of the issue of the licence on the Bank's Internet site.
5: In this section, relevant Lloyd's underwriter section 200
6: In this section and section 209 FSA Financial Services and Markets Act 2000
206: Conditions of Lloyd's licence
1: Lloyd's may be issued with a licence under section 203 205
2: The conditions may impose obligations on Lloyd's, any Lloyd's underwriter that will carry on insurance business referred to in section 200
3: Section 22(1) and (3)
207: Obligations on Lloyd's
1: If Lloyd's holds a licence issued under section 203
a: the conditions of the licence:
b: the directions given under section 209
2: If Lloyd's holds a licence issued under section 205
a: the Lloyd's fit and proper policy:
b: the Lloyd's risk management programme:
c: the conditions of the licence:
d: the directions given under section 209
3: Lloyd's commits an offence and is liable, on
4: If the Bank is satisfied that Lloyd's has persistently or seriously failed to comply with subsection (1) or (2) or section 210 211
5: The Bank may, for the purpose of facilitating a cancellation under subsection (4), direct a Lloyd's underwriter to arrange, subject to the Bank’s approval, to assign the underwriter's liabilities under contracts of insurance with New Zealand policyholders to 1 or more licensed insurers (and for that purpose, sections 31(2) to (5) 32 33 Section 207(3) amended 1 July 2013 section 413 Criminal Procedure Act 2011
208: Provisions that do not apply in respect of Lloyd's or Lloyd's underwriters
Sections 15 to 43 73 to 81 244 to 248 section 207(5)
209: Bank may direct that Lloyd’s underwriters must not issue or renew contracts of insurance
1: The Bank may give Lloyd's a direction, in writing, under subsection (2) if it has reasonable grounds to believe that 1 or more of the following apply:
a: as a result of an enactment of an Act of the United Kingdom, a substantial change is made in the constitution, powers, rights, or obligations of Lloyd’s or of Lloyd’s underwriters:
b: as a result of a making of a bylaw by Lloyd’s, the rights or obligations of Lloyd’s underwriters are substantially changed:
c: there has been a substantial change in the nature, or extent, of the FSA's supervision of Lloyd's or of Lloyd’s underwriters.
2: A direction may do either or both of the following:
a: direct that Lloyd’s underwriters must not enter into contracts of insurance, or undertake liability under contracts of insurance, with New Zealand policyholders:
b: direct that Lloyd’s underwriters must not renew contracts of insurance with New Zealand policyholders.
210: Agent of Lloyd’s and address for service
1: Lloyd’s must at all times during which it holds a licence—
a: be represented for the purposes of this Act by an individual resident in New Zealand who is appointed by Lloyd’s as the agent of Lloyd’s for the purposes of this Act; and
b: have an address in New Zealand for service for the purposes of this Act.
2: Lloyd's must notify the Bank of the matters referred to in subsection (1) and of any changes to those matters.
3: Anything done in his or her representative capacity by a person appointed by Lloyd’s as, or to act as, its agent in accordance with this section is taken, for the purposes of this Act, to have been done by Lloyd’s.
211: Lloyd’s to give notice of enactments and bylaws
If an Act of the United Kingdom is enacted relating specifically to Lloyd’s, or a bylaw is made under the Acts of the United Kingdom known as the Lloyd’s Acts 1871–1982 or under any later Act of the United Kingdom relating to Lloyd’s, Lloyd’s must, within the period of 21 days after the enactment of the Act or the making of the bylaw, give written notice of that matter to the Bank if there are reasonable grounds to believe that the matter will have a material effect on either or both of the following:
a: the insurance business carried on by any Lloyd's underwriter in New Zealand:
b: any New Zealand policyholder under a contract of insurance entered into by a Lloyd's underwriter.
212: Act does not authorise Lloyd’s underwriter to carry on any business underwriter could not otherwise have carried on
Nothing in this Act authorises the carrying on by a Lloyd's underwriter of any business that the underwriter would not have been authorised to carry on if this Act had not been enacted. Access to information by overseas supervisor
213: Access to information by overseas supervisor
1: For the purpose of the exercise by an overseas supervisor of its supervisory functions, the Bank may authorise an overseas supervisor to do either or both of the following:
a: conduct an inspection of any licensed insurer that is an overseas person:
b: require any licensed insurer that is an overseas person to supply to the overseas supervisor any information, data, or forecasts relating to that person.
2: The information, data, or forecasts that an overseas supervisor may be authorised to obtain may include, without limitation, information about the affairs of a particular customer or client of the licensed insurer.
3: The Bank may grant an authorisation only if it is satisfied that sufficient provision exists to protect the confidentiality of the information, data, or forecasts obtained or required by the overseas supervisor.
4: An authorisation may be—
a: granted for the period or periods that the Bank thinks fit; and
b: varied, revoked, or amended by the Bank.
5: The Bank must give notice in writing to a licensed insurer if the Bank—
a: grants an authorisation in relation to that person; or
b: varies, revokes, or amends that authorisation.
6: This section has effect despite anything to the contrary in any other enactment or rule of law.
214: Duties of person on receipt of notice under section 213
1: A licensed insurer that is an overseas person must, on receipt of a notice from the Bank under section 213
a: permitting the overseas supervisor to conduct an inspection of that person; or
b: supplying the overseas supervisor with the required information, data, or forecasts within the time, and at the place, specified in the notice.
2: A licensed insurer that is an overseas person commits an offence if the person fails to comply in any respect with any requirements notified by the Bank under section 213 Section 214(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Offences
215: False declarations and representations
1: Every person commits an offence who, for any purpose relating to this Act, either on the person's own behalf or on behalf of any other person,—
a: either orally or in writing, makes any declaration or representation to the Bank or an investigator that, to the person's knowledge, is false or misleading in any material particular; or
b: supplies to the Bank or an investigator any document knowing it to contain any declaration or representation of that kind; or
c: supplies to the Bank or an investigator a document knowing that it is not genuine.
2: Every person who commits an offence under this section is liable on
a: in the case of an individual, to a fine not exceeding $200,000:
b: in the case of a body corporate, to a fine not exceeding $500,000.
3: This section does not apply in the case of section 17(4) 201(4) Section 215(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
216: Liability of directors
If a body corporate is convicted of an offence under this Act, every director of the body corporate is guilty of the offence if it is proved—
a: that the act that constituted the offence took place with his or her authority, permission, or consent; or
b: that he or she—
i: knew, or could reasonably be expected to have known, that the offence was to be or was being committed; and
ii: failed to take reasonable steps to prevent or stop it.
217: Defence for offences against this Act
1: In any prosecution of a person for an offence under this Act, it is a defence if the person proves that—
a: the failure to comply with this Act was due to the act or omission of another person, or some other cause beyond the person's control; and
b: the person took reasonable precautions and exercised due diligence to avoid the failure.
2: For the purposes of subsection (1)﻿(a), another person
3: A person is not, without the leave of the court, entitled as part of a defence provided by this section to rely on any of the circumstances specified in subsection (1)﻿(a) unless the person has, not later than 7 working days before the date on which the hearing of the proceedings commences, served on the prosecution a notice in writing identifying the act, omission, or cause relied on by the person.
217A: Time for filing charging document
Despite anything to the contrary in section 25 Section 217A inserted 4 September 2013 section 12 Insurance (Prudential Supervision) Amendment Act 2013 Prohibition against falsely holding out New Zealand connection
218: Prohibition against falsely holding out New Zealand connection
1: No New Zealand person or overseas company may hold out outside New Zealand that the person carries on insurance business in New Zealand, or that the person is regulated by New Zealand law in respect of insurance business carried on in New Zealand by the person, if the person does not carry on insurance business in New Zealand.
2: In this section and section 219 New Zealand person
a: a body corporate or an association of persons incorporated or formed in New Zealand:
b: a person who is ordinarily resident in New Zealand overseas company Companies Act 1993
3: A New Zealand person or an overseas company that fails to comply with this section commits an offence and is liable, on
a: in the case of an individual, to a fine not exceeding $50,000:
b: in the case of a body corporate, to a fine not exceeding $200,000. Section 218(3) amended 1 July 2013 section 413 Criminal Procedure Act 2011
219: Certain New Zealand persons and overseas companies prohibited from using certain words in name
1: If a New Zealand person or an overseas company does not carry on insurance business in New Zealand, the person cannot—
a: be formed, incorporated, or registered in New Zealand using a name or title that includes a restricted word; or
b: change the person's name or title in New Zealand to a name or title that includes a restricted word; or
c: carry on any activity directly or indirectly in New Zealand (whether through an agent or otherwise) using a name or title that includes a restricted word.
2: The restricted words are the following in any language:
a: insurance:
b: assurance:
c: underwriter:
d: reinsurance:
e: any term whose meaning is the same as, or similar to, that of any term in paragraphs (a) to (d).
3: A New Zealand person or an overseas company that fails to comply with this section commits an offence and is liable, on
a: in the case of an individual, to a fine not exceeding $50,000:
b: in the case of a body corporate, to a fine not exceeding $200,000. Section 219(3) amended 1 July 2013 section 413 Criminal Procedure Act 2011
220: Prohibition does not apply in certain cases
1: Sections 218 219
a: assists in issuing or administering contracts of insurance, or in collecting premiums:
b: acts as an insurance loss adjuster or assessor:
c: arranges, negotiates, solicits, or promotes contracts of insurance or the renewals of contracts of insurance or both (for example, a broker or other insurance intermediary).
2: Sections 218 219
3: In this section, industry association
a: representing members' views to non-members, including the Government:
b: providing dispute resolution:
c: providing education and training for members:
d: providing social events for members:
e: establishing rules or codes of conduct.
4: The Bank may, by notice in writing to a person, exempt the person from section 219
a: will not be carrying on insurance business in New Zealand; and
b: has a legitimate reason to use the particular word in the person's name.
5: Subsection (4) is subject to section 232 Restriction on insurer's constitution
221: Insurer's constitution must not permit directors to act in holding entity's best interests even though it is not in insurer's best interests
1: If a licensed insurer is a subsidiary, a provision in the constitution of the insurer is of no effect to the extent that it purports to permit a director of the insurer, when exercising powers or performing duties as a director, to act in a manner that he or she believes is in the best interests of the insurer's holding entity even though it may not be in the best interests of the insurer.
2: Subsection (1) applies despite section 131(2)
3: In this section, constitution
a: in the case of a company within the meaning of the Companies Act 1993
b: in any other case, the documents or instruments constituting or defining the constitution of the insurer.
4: This section does not apply to an overseas insurer. Ban ordered by District Court
222: Power to ban certain persons from participating in insurance business
1: The District Court
a: has, in connection with an insurance business, engaged in an act, omission, or course of conduct that constitutes serious wrongdoing and that the person is not a fit and proper person to participate in insurance business in 1 or more of the ways described in subsection (2); or
b: as a director of a licensed insurer, has persistently or seriously failed to comply with this Act or the regulations; or
c: is a director of a licensed insurer, being an insurer that has persistently or seriously failed to comply with any direction, condition, or other requirement imposed by or under this Act or the regulations, and the person has persistently failed to take reasonable steps to prevent or stop that failure; or
d: is prohibited from participating in an insurance business in 1 or more of the ways specified in subsection (2)﻿(a) to (g) under an order made, or a notice given, under a law of a country, State, or territory outside New Zealand.
2: The order is an order banning a person from being or doing 1 or more of the following:
a: being a director of an insurer:
b: being concerned or taking part in the management of an insurer:
c: being a shareholder of an insurer:
d: being an employee or other agent of an insurer:
e: acting under a contract for services with an insurer:
f: being an insurance intermediary:
g: otherwise participating in an insurance business in any other way (whether paid or unpaid).
3: Every application to the District Court
4: A ban under this section has effect from the date specified in the order even though an appeal may have been lodged under section 224
5: An order may be—
a: made even though the person concerned may be criminally liable for the matters on the grounds of which the order is to be made; and
b: permanent or for a specified time; and
c: subject to the terms and conditions that the District Court thinks fit; and
d: cancelled or varied at any time by the District Court.
6: The District Court may make any order in the matter as to costs and otherwise as it thinks fit.
7: As soon as practicable after an order is made, the Registrar of the District Court must send a copy of the order to the Bank. Section 222(1) amended 1 March 2017 section 261 District Court Act 2016 Section 222(3) amended 1 March 2017 section 261 District Court Act 2016
223: Notice of hearing
1: If an application is made for an order under section 222
a: fix the time and place for the hearing of the application; and
b: as soon as practicable, give notice of the application and of the time and place of the hearing to—
i: the Bank; and
ii: the person to whom the application relates; and
iii: any other person who appears to the Registrar of the District Court to have a sufficient connection with the proceedings.
2: On the hearing of the application,—
a: the Bank must appear and call to the attention of the District Court any matters that seem to the Bank to be relevant, and may give evidence or call witnesses; and
b: the person to whom the application relates may appear and give evidence or call witnesses; and
c: any person referred to in subsection (1)﻿(b)﻿(iii) may also appear and be heard.
224: Appeals to High Court
1: Any person who has a right to appear and be heard in any proceedings under section 222 the District Court
a: has made or refused to make an order under that section; or
b: has otherwise finally determined or has dismissed the proceedings.
2: An appeal is by way of rehearing. Section 224(1) amended 1 March 2017 section 261 District Court Act 2016
225: Appeal to Court of Appeal on question of law
1: Any party to an appeal under section 224 section 56
2: In determining whether to grant leave to appeal, the Court of Appeal must have regard to whether the question of law involved in the appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for its decision.
3: The Court of Appeal, in granting leave, may impose the conditions that it thinks fit, whether as to costs or otherwise.
4: The decision of the Court of Appeal on any application for leave to appeal, or on an appeal under this section, is final. Section 225(1) amended 1 March 2017 section 183(b) Senior Courts Act 2016
226: Register of banned persons
1: The Bank must keep a register of persons banned under section 222 register
2: The register may be—
a: an electronic register; or
b: kept in any other manner that the Bank thinks fit.
3: The Bank must take all reasonable steps to ensure that the information contained in the register is available to members of the public at all reasonable times.
227: Search of register
1: A person may search the register in accordance with this Act or the regulations.
2: The register may be searched only by reference to the following criteria:
a: in the case of an individual,—
i: the name, or former name, of the person:
ii: the residential or business address of the person:
iii: the person's date of birth:
iv: any combination of the criteria in subparagraphs (i) to (iii):
b: in the case of a body corporate,—
i: the name, or former name, of the body corporate:
ii: the address of the body corporate's registered office:
iii: the address of any place of business of the body corporate:
iv: any combination of the criteria in subparagraphs (i) to (iii).
3: A search of the register may be carried out only by the following persons for the following purposes:
a: an individual, or a person with the consent of the individual, for the purpose of searching for information about that individual:
b: a person for the purpose of determining whether or not a person is banned under section 222
4: A search of the register for personal information that has not been carried out in accordance with this section constitutes an action that is an interference with the privacy of an individual under section 69 Section 227(4) amended 1 December 2020 section 217 Privacy Act 2020
228: Offence for banned person to participate in insurance business in breach of order
A person commits an offence if the person fails to comply with an order under section 222
a: in the case of an individual, to imprisonment for a term not exceeding 3 months or to a fine not exceeding $200,000 (or both):
b: in the case of a body corporate, to a fine not exceeding $1,000,000. Section 228 amended 1 July 2013 section 413 Criminal Procedure Act 2011 Notice and service
229: Notice and service of documents
1: Unless this Act provides otherwise, if a provision of this Act requires or authorises any notice or other document, or any notification, to be given or provided to a person, the notice, document, or notification must be in writing and must, in the case of a notice, document, or notification being given or provided to—
a: an individual, be given—
i: by delivering it personally or by an agent (such as a courier) to the person; or
ii: by sending it by post addressed to the person at the person's usual or last known place of residence or business; or
iii: by sending it by fax or email to the person's fax number or email address provided by the person for the purpose; or
iv: in any other manner a District Court Judge directs:
b: a company within the meaning of the Companies Act 1993, be served in a manner provided for in section 387(1) 388
c: an overseas company, be served in a manner provided for in section 389(1) 390
d: any other body corporate, be served in a manner in which it could be given or served if the body corporate were a company within the meaning of the Companies Act 1993
2: In the absence of proof to the contrary, a notice, document, or notification sent to a person in accordance with—
a: subsection (1)﻿(a)﻿(ii) must be treated as having been given or provided to the person when it would have been delivered in the ordinary course of post; and, in proving the delivery, it is sufficient to prove that the letter was properly addressed and posted:
b: subsection (1)﻿(a)﻿(iii) must be treated as having been given or provided to the person on the second working day after the day on which it is sent.
3: Section 392
4: If a person is absent from New Zealand, a notice, document, or notification given to the person's agent in New Zealand in accordance with subsection (1) must be treated as having been given or provided to the person.
5: If a person has died, the notice, document, or notification may be given, in accordance with subsection (1), to his or her personal representative. Protection from liability and indemnity Heading repealed 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021
230: Protection from liability
Section 230 repealed 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021
231: Indemnity
Section 231 repealed 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 General provisions relating to declarations and exemptions
232: General provisions relating to declarations and exemptions
1: This section applies to a declaration under section 9
2: This section also applies to an exemption granted under any of the following sections:
a: section 38
b: section 59
ba: section 60(2A)
c: section 119
d: section 204(4)
e: section 220(4)
3: The Bank may give a declaration or grant an exemption unconditionally or subject to any conditions that the Bank thinks fit (after taking into account the purposes of this Act and the principles set out in section 4
4: The Bank must make every
a: for inspection at all reasonable times, free of charge,—
i: at the head office of the Bank; and
ii: on the Bank's Internet site; and
b: for purchase at all reasonable times and at a reasonable price.
5: The Bank's reasons for giving a declaration or granting an exemption (including why it is appropriate) must be published or
6: The Bank may amend or revoke a declaration or exemption in the same way as it may be given or granted.
7: Lloyd's may apply for an exemption on behalf of Lloyd's underwriters.
8: A declaration is secondary legislation ( see Part 3
9: The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation referred to in subsection (1). Legislation Act 2019 requirements for secondary legislation referred to in subsection (1) Publication The maker must: LA19 ss 73 74(1)﻿(a) cl 14 •	publish it on their website •	make it available for inspection free of charge at the head office of the Bank •	make it available for sale at a reasonable price •	comply with section 232(5) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 232(2)﻿(ba) inserted 4 September 2013 section 13 Insurance (Prudential Supervision) Amendment Act 2013 Section 232(4) amended 28 October 2021 section 3 Secondary Legislation Act 2021 Section 232(5) amended 28 October 2021 section 3 Secondary Legislation Act 2021 Section 232(8) replaced 28 October 2021 section 3 Secondary Legislation Act 2021 Section 232(9) repealed 28 October 2021 section 3 Secondary Legislation Act 2021 General provisions relating to fit and proper standards and solvency standards
233: Status of standards
The following are secondary legislation ( see Part 3
a: fit and proper standards:
b: solvency standards. The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation referred to in paragraph (a). Legislation Act 2019 requirements for secondary legislation referred to in paragraph (a) Publication The maker must: LA19 ss 73 74(1)﻿(a) cl 14 •	notify it in the Gazette •	publish it on their website •	make it available for inspection free of charge at the head office of the Bank •	make it available for sale at a reasonable price Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation referred to in paragraph (b). Legislation Act 2019 requirements for secondary legislation referred to in paragraph (b) Publication The maker must: LA19 ss 73 74(1)﻿(a) cl 14 •	notify it in the Gazette •	publish it on their website •	make it available for inspection free of charge at the head office of the Bank •	make it available for sale at a reasonable price The Ministry of Foreign Affairs and Trade considers that the secondary legislation may have international transparency obligations under the CPTPP s 75 LA19 ss 74(2) 75 Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 233 replaced 28 October 2021 section 3 Secondary Legislation Act 2021
234: Public notice of standards
Section 234 repealed 28 October 2021 section 3 Secondary Legislation Act 2021
235: Consultation
1: The Bank must not issue a fit and proper standard or solvency standard unless—
a: the Bank has consulted the persons or representatives of the persons that the Bank considers will be substantially affected by the issue of the standard; and
b: those persons have had a reasonable opportunity to comment to the Bank; and
c: the Bank has considered those comments.
2: A failure to comply with subsection (1) does not affect the validity of the standard.
3: Any action taken by or on behalf of the Bank before the commencement of this section in consulting persons or representatives of persons on proposed fit and proper standards or solvency standards must be treated as having been taken by the Bank under, and for the purposes of, this section.
4: However, the Bank is not required to comply with this section in respect of an amendment to a fit and proper standard or solvency standard if, in its opinion, the amendment corrects a minor error or is otherwise of a minor nature. Section 235(4) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
236: Bank may amend, revoke, or replace standard
Section 236 repealed 28 October 2021 section 3 Secondary Legislation Act 2021 Regulations
237: Regulations
1: The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, make regulations for all or any of the following purposes:
a: declaring a class or classes of transactions or matters to be transactions or matters that are not by way of insurance for the purposes of this Act:
b: declaring a public entity to be an entity to which section 8(2)﻿(d)
c: prescribing additional requirements for a person to be entitled to be issued with a licence:
d: prescribing countries, states, or territories as jurisdictions for the purposes of sections 19(4) 38(3) 119(3)
e: prescribing additional matters for the purposes of section 20(2)﻿(g)
f: prescribing conditions or matters that conditions may relate to for the purposes of section 21(2)﻿(h) 49(3)﻿(d)
g: prescribing for the purposes of sections 34(4) 202(2)
i: processes to be undertaken in assessing whether a person is fit and proper to be appointed to, and hold, a position; and
ii: actions to be taken where a person is assessed as not being fit and proper; and
iii: reassessments to ensure that a person who holds a position remains a fit and proper person:
h: prescribing—
i: the circumstances and manner in which a financial strength rating must contain, or be accompanied by, a reference to an overseas policyholder preference for the purposes of section 61
ii: the circumstances in which disclosure of an overseas policyholder preference under section 72
iii: the manner in which the disclosure under subparagraph (ii) must be made:
i: prescribing types of risk for the purposes of section 73
j: prescribing auditing and registration requirements in respect of interim financial information section 81
k: declaring a class or classes of contracts not to be life policies for the purposes of section 84
l: prescribing matters for the purposes of section 88
m: prescribing the manner in which amounts are ascertained or calculated, notices are given, applications are made, or records are kept for the purposes of sections 88 89 94 100 111
n: prescribing matters relating to the transfer of assets, and the crediting of amounts, to a statutory fund on its establishment for the purposes of sections 89 92(a)
o: prescribing arrangements for the purposes of section 94
p: declaring classes of transactions for the purposes of section 97
q: prescribing restrictions and requirements for the purposes of section 98
r: prescribing circumstances for the purposes of section 99(2)﻿(c) section 99(2)﻿(d) section 99(4)
s: prescribing matters for the purposes of sections 112 to 115
i: how the amount of an operating profit or operating loss is to be determined; and
ii: requirements relating to how the operating profit or operating loss must be allocated; and
iii: the manner in which categories of business of a statutory fund are determined; and
iv: requirements relating to the amount or proportion of profits (or certain parts of profits) that must be treated as, or added to, policyholders' retained profits of a fund or shareholders' or members' retained profits of a fund (including providing for the amount or proportion to be determined or calculated in a specified manner); and
v: requirements relating to the amount or proportion of losses (or certain parts of losses) that must or may be taken into account in reduction of policyholders' retained profits of a fund or shareholders' or members' retained profits of a fund (including providing for the amount or proportion to be determined or calculated in a specified manner); and
vi: how the amount of policyholders' retained profits of a fund, shareholders' or members' retained profits of a fund, or shareholders' or members' capital is determined or calculated; and
vii: requirements relating to the distribution of retained profits of a fund and shareholders' or members' capital in relation to a fund (including rules relating to ways in which distributions must or may be made, to whom, and restrictions on distributions):
t: prescribing forms for the purposes of this Act, and prescribing—
i: the inclusion in, or attachment to, forms of specified information or documents:
ii: forms to be signed by specified persons:
u:
v: prescribing procedures, requirements, and other matters for the register kept under section 54A 226
w: prescribing transitional or savings provisions relating to the coming into force of subpart 3
x: providing for any other matters contemplated by this Act, necessary for its administration, or necessary for giving it full effect.
2: Regulations made under this section or any other provision of this Act may prescribe different matters in respect of different classes of persons.
3: Regulations made under subsection (1)﻿(w) may provide that, subject to the conditions that are specified in the regulations, during a specified transitional period,—
a: specified provisions of this Act (including definitions) do not apply:
b: specified provisions repealed or amended or revoked by this Act continue to apply.
4: All regulations made under subsection (1)﻿(w) that are still in force on the day that is 3 years after the commencement of this section expire on the close of that day.
5:
6:
7:
8: Regulations under this section are secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 237(1)﻿(j) amended 4 September 2013 section 14(1) Insurance (Prudential Supervision) Amendment Act 2013 Section 237(1)﻿(u) repealed 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 237(1)﻿(v) amended 4 September 2013 section 14(2) Insurance (Prudential Supervision) Amendment Act 2013 Section 237(5) repealed 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 237(6) repealed 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 237(7) repealed 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021 Section 237(8) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
238: Regulations may provide for exemptions
1: The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, make regulations for all or any of the following purposes:
a: exempting a class of specified persons that have an annual gross premium income (as determined in the manner specified in the regulations) that is less than a specified amount from compliance with—
i: section 19(1)﻿(d) or (f)
ii: section 60
iii: any provision of section 81
iv: subpart 3
b: exempting a class of specified persons that have an annual gross premium income (as determined in the manner specified in the regulations) that is less than a specified amount —
i: from being—
A: an FMC reporting entity (and, consequentially, a climate reporting entity) for the purposes of the Financial Markets Conduct Act 2013 by virtue of section 451(1)﻿(h)
B: a climate reporting entity for the purposes of the Financial Markets Conduct Act 2013 by virtue of section 461O(1)﻿(c)
ii: from being section 4(1)﻿(da)
c: prescribing terms and conditions that an exemption under paragraph (a) or (b) is subject to.
2: If the terms and conditions of an exemption under subsection (1)﻿(a) or (b) that are prescribed under subsection (1)﻿(c) are not complied with by a person, the exemption does not apply to the person.
3: For the purposes of subsection (1),—
a: different amounts of annual gross premium income may be specified in the regulations in respect of different exemptions; and
b: the regulations may specify a different manner of determining a person's annual gross premium income in respect of different exemptions; and
c: the regulations may require an amount or proportion of income of a specified kind to be disregarded in specified circumstances for the purpose of determining a person's annual gross premium income.
4: In this section, specified person
a: a person that was carrying on insurance business in New Zealand immediately before the commencement of this section; or
b: a friendly society (within the meaning of section 2
5: Regulations under this section are secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 238(1)﻿(b) replaced 1 April 2014 section 126 Financial Reporting (Amendments to Other Enactments) Act 2013 Section 238(1)﻿(b) amended 27 October 2022 section 55(2) Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 Section 238(1)﻿(b)﻿(i) replaced 27 October 2022 section 55(2) Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 Section 238(1)﻿(b)﻿(ii) amended 27 October 2022 section 55(2) Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 Section 238(5) inserted 28 October 2021 section 3 Secondary Legislation Act 2021 Incorporation by reference Heading inserted 4 September 2013 section 15 Insurance (Prudential Supervision) Amendment Act 2013
238A: Incorporation by reference
1: This section applies to the following instruments:
a: a declaration under section 9
b: a fit and proper standard:
c: a solvency standard:
d: regulations.
2: The following written material may be incorporated by reference in an instrument referred to in subsection (1):
a: standards, requirements, or recommended practices of international or national organisations:
b: standards, requirements, or recommended practices prescribed in any country or jurisdiction:
c: any other written material that deals with technical matters and is too large or impractical to include in, or print as part of, the instrument.
3: Schedule 1 Section 238A inserted 4 September 2013 section 15 Insurance (Prudential Supervision) Amendment Act 2013 Repeals and consequential amendments
239: Amendments to Life Insurance Act 1908
1: This section amends the Life Insurance Act 1908
2: Parts 1 1A sections 78 to 79A Schedules 2 to 7 20 24 2012-03-07 Life Insurance Act 1908 Unless an OIC comes in before this date (see s 2(3) and (4) above).
240: Repeals
The following Acts are repealed:
a: Insurance Companies' Deposits Act 1953
b: Insurance Companies (Ratings and Inspections) Act 1994
c: Mutual Insurance Act 1955 2012-03-07 Insurance Companies' Deposits Act 1953 Insurance Companies (Ratings and Inspections) Act 1994 Mutual Insurance Act 1955 Unless an OIC comes in before this date (see s 2(3) and (4) above).
241: Amendments to other enactments
1: The Reserve Bank of New Zealand Act 1989 Part 1
2: The enactments specified in Parts 2 3 2010-09-08 Reserve Bank of New Zealand Act 1989 section 241(1) only OIC (SR 2010/446) 2011-02-01 Accident Compensation Act 2001 Anti-Money Laundering and Countering Financing of Terrorism Act 2009 Companies Act 1993 Corporations (Investigation and Management) Act 1989 Financial Advisers Act 2008 Financial Reporting Act 1993 Financial Transactions Reporting Act 1996 Friendly Societies and Credit Unions Act 1982 Insolvency (Cross-border) Act 2006 Insurance Law Reform Act 1977 Life Insurance Act 1908 Life Insurance Amendment Act 1920 Privacy Act 1993 Summary Proceedings Act 1957 Overseas Investment Regulations 2005 Securities Regulations 2009 Unless an OIC comes in before this date (see s 2(3) and (4) above).
242: Amendment to Financial Service Providers (Registration and Dispute Resolution) Act 2008
1: This section amends the Financial Service Providers (Registration and Dispute Resolution) Act 2008
2: Schedule 2 The following table is small in size and has 3 columns. This table is an amendment to the table in Schedule 2 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 and should be read with that table to provide understanding of the context. Reserve Bank of New Zealand Licensed insurers Insurance (Prudential Supervision) Act 2010 2013-09-07 Financial Service Providers (Registration and Dispute Resolution) Act 2008 Transitional and savings provisions
243: Bank may approve certain transfers
1: The Bank may, on the request of an insurer that is not a licensed insurer, give its written approval to a transaction that involves,—
a: in the case of an overseas insurer, the transfer of all or part of the insurer's New Zealand insurance business to another insurer; or
b: in the case of any other insurer, the transfer of all or part of the insurer's insurance business to another insurer.
2: If the Bank approves a transfer under subsection (1), section 53
3: A request for the Bank to give its approval under subsection (1) must be—
a: made within 18 months after the date on which this section comes into force; and
b: made in the manner that is specified by the Bank; and
c: accompanied by payment of the prescribed fee for the request (if any).
4: An insurer that makes a request and every other party to the proposed transfer must provide to the Bank the information that is required by the Bank to assist it in determining whether to give its approval.
5: Sections 46 to 48
6: The Bank may, after considering a request made under subsection (1), by notice in writing to the insurer,—
a: give its approval unconditionally or subject to any conditions that the Bank thinks fit; or
b: refuse to give its approval.
7: If the Bank refuses to give its approval, it must give a notice to the insurer that contains a statement of its reasons.
244: Bank must issue provisional licence pending consideration of application
The Bank must issue a provisional licence to a person if the Bank is satisfied that—
a: the person was carrying on insurance business in New Zealand immediately before the commencement of this section; and
b: the person has, within 3 months after the commencement of this section, notified the Bank that it—
i: was carrying on insurance business in New Zealand immediately before the commencement of this section; and
ii: intends to continue carrying on insurance business in New Zealand after the date that is 18 months after the date on which this Act receives the Royal assent; and
c: the person has, within 18 months after the date on which this Act receives the Royal assent, made, or purported to make, an application under sections 17 18
d: the person has taken reasonable steps to—
i: provide a fit and proper policy that complies with section 34
ii: provide a risk management programme that complies with section 73
iii: otherwise make the application in the manner that is specified by the Bank.
245: Bank may also issue provisional licence for insurer that is or will be in run-off
The Bank may also issue a provisional licence to a person if the Bank is satisfied that—
a: the person was carrying on insurance business in New Zealand immediately before the commencement of this section; and
b: the person has given to the Bank a notice stating that it intends to cease carrying on insurance business in New Zealand before the date that is 3 years after the date on which this Act receives the Royal assent.
246: Duration of provisional licence
1: A provisional licence remains in force until the earliest of the following:
a: the issue of a licence under Part 2
b: the date that the provisional licence is cancelled under subsection (2):
c: the date that is 3 years after the date on which this Act receives the Royal assent.
1A: Subsection (1B) applies to an entity if—
a: the entity still holds a provisional licence immediately before the date (the 3-year date
b: 1 or more of the following apply to the entity:
i: the entity is, immediately before the 3-year date, subject to an insolvency proceeding or process:
ii: an application for a licence for the entity under section 17
iii: a direction under section 143
1B: Despite subsection (1), if this subsection applies to an entity, the provisional licence of the entity remains in force until it is cancelled under subsection (2).
2: The Bank may cancel a provisional licence if—
a: the holder has asked the Bank, by written notice, to cancel the licence; or
b: the Bank is satisfied that the holder has ceased to carry on insurance business in New Zealand; or
c: in the case of subsection (1B), the Bank is satisfied that—
i: the holder is no longer subject to an insolvency proceeding or process; or
ii: the holder is a company that has been removed from the New Zealand register (within the meaning of the Companies Act 1993
iii: the holder is an overseas company that has been removed from the overseas register (within the meaning of the Companies Act 1993
iv: the holder has been liquidated, wound up, or dissolved or has otherwise ceased to exist; or
v: for any other reason, it is no longer appropriate for the provisional licence to remain in force.
3: Subsection (2)﻿(c) does not limit subsection (2)﻿(a) or (b)
4: In this section, an entity is subject to an insolvency proceeding or process
a: the entity is in liquidation under the Companies Act 1993
b: the entity is in voluntary administration or subject to a deed of company arrangement:
c: a receiver has been appointed and is acting in relation to the whole, or substantially the whole, of the assets and the undertaking of the entity:
d: the entity is subject to a compromise with its creditors that has been approved under Part 14
e: an order that an arrangement or a compromise is binding on the entity has been made under Part 15
f: the entity is in statutory management under this Act, the Corporations (Investigation and Management) Act 1989
g: in the case of an overseas person, the overseas person is subject to a proceeding or process in its home jurisdiction that is similar to any of those set out in paragraphs (a) to (f). Section 246(1A) inserted 4 September 2013 section 16(1) Insurance (Prudential Supervision) Amendment Act 2013 Section 246(1B) inserted 4 September 2013 section 16(1) Insurance (Prudential Supervision) Amendment Act 2013 Section 246(2)﻿(b) replaced 4 September 2013 section 16(2) Insurance (Prudential Supervision) Amendment Act 2013 Section 246(2)﻿(c) inserted 4 September 2013 section 16(2) Insurance (Prudential Supervision) Amendment Act 2013 Section 246(3) inserted 4 September 2013 section 16(3) Insurance (Prudential Supervision) Amendment Act 2013 Section 246(4) inserted 4 September 2013 section 16(3) Insurance (Prudential Supervision) Amendment Act 2013
247: Provisional licence holder only required to comply with requirements to extent required by conditions
1: A provisional licence holder is required to comply with the specified requirements only to the extent that the conditions of the licence require the holder to comply.
2: In this section and section 248 specified requirements
a: sections 34 to 37
b: sections 55 to 81
c: subpart 3
3: If an insurer becomes, or will become, an issuer under section 4(1)﻿(da)
a: the conditions of the licence may specify the accounting periods or interim accounting periods in respect of which the insurer must be treated as being an issuer under that Act (being periods that commence on or after the date that the licence is issued); and
b: the Financial Reporting Act 1993
248: Conditions of licence
1: A provisional licence may be issued subject to—
a: conditions that require the provisional licence holder to comply with the specified requirements in whole or in part and with any modifications, additions, or variations specified in the conditions; and
b: conditions that require the provisional licence holder to take specified actions to bring the holder into compliance with the specified requirements (including setting an appropriate timetable for taking those actions to ensure that those actions are taken as soon as practicable); and
c: conditions, in the case of a licence under section 245
i: the provisional licence holder to cease entering into all contracts of insurance or contracts of insurance of a particular kind (whether by way of renewal or otherwise):
ii: the provisional licence holder to arrange for the transfer of all or part of the holder's insurance business to another person in the manner specified in the condition:
iii: the provisional licence holder to otherwise take specified actions to ensure that the holder ceases to carry on insurance business in New Zealand before the date that is 3 years after the date on which this Act receives the Royal assent (including setting an appropriate timetable for taking those actions); and
d: a condition under section 247(3)
e: any other conditions that the Bank thinks fit.
2: The Bank may, at any time after a provisional licence is issued, by notice in writing to the provisional licence holder,—
a: impose conditions of the provisional licence (whether or not the licence is already subject to conditions); or
b: vary, remove, add to, or substitute any conditions of the provisional licence.
3: The Bank must not exercise a power referred to in subsection (2) unless—
a: the Bank gives the provisional licence holder not less than 7 days' notice in writing of the Bank's intention to do so; and
b: the notice contains, or is accompanied by, a statement of the Bank's reasons; and
c: the provisional licence holder has a reasonable opportunity to make submissions to the Bank; and
d: the Bank has regard to those submissions.
249: Public Trust must return deposits
1: Public Trust must return to a depositor a deposit made with Public Trust under the Insurance Companies' Deposits Act 1953 Life Insurance Act 1908 Mutual Insurance Act 1955
a: the date that Public Trust receives a notice from the Bank under subsection (2):
b: in the case of a non-licensed depositor, the date that is 18 months after the date on which this Act receives the Royal assent:
c: the date that is 3 years after the date on which this Act receives the Royal assent.
2: The Bank must give a notice for the purposes of subsection (1)﻿(a) in respect of a depositor if the depositor has been issued with a licence under Part 2 section 205
3: If, before a deposit is returned under this section, the depositor is put into liquidation in New Zealand,—
a: subsection (1) does not apply; and
b: the deposit must be applied and otherwise dealt with in accordance with the Insurance Companies' Deposits Act 1953 Life Insurance Act 1908
4: Until a deposit is returned under this section or is otherwise withdrawn, the Insurance Companies' Deposits Act 1953 Life Insurance Act 1908
5: Every return of securities made for the purposes of this section must be made as follows (unless the depositor otherwise directs in a written notice given to Public Trust):
a: in the case of securities that are payable to bearer, by the delivery of the securities by Public Trust to the depositor:
b: in the case of securities that are not payable to bearer, by the transfer of the securities by Public Trust to the depositor.
6: In this section,— depositor Insurance Companies' Deposits Act 1953 Life Insurance Act 1908 Mutual Insurance Act 1955 non-licensed depositor Part 2 section 203 205
250: Deposit may be withdrawn in accordance with Insurance Companies' Deposits Act 1953 or Life Insurance Act 1908
A deposit may be withdrawn in accordance with section 3A 8 9 19 section 6 11 12
251: Savings in respect of judicial management
Despite the repeal, by section 239 Part 1A
a: the provisions of that Act, and in particular Part 1A
b: any person empowered under that Act to exercise any power or function in respect of a person referred to in paragraph (a) continues to have, in respect of that person, the same powers and functions that the person had before the commencement of this section.