reserve bank would prefer to see senior management actively demonstrating or providing evidence of compliance to directors. reviewing requirements in the reserve bank ’ s corporate governance policy ( bs14 ) related to, for example, tenure limits for independent directors, limits on directorships and requirements on banking experience. reviewing bs10 to require banks to undertake on - going suitability assessments of their directors and senior managers. the reserve bank will also be providing greater clarity on the definition of ‘ senior manager ’ for the purposes of the current non - objection process. insurer disclosure 8 / 11 bis central bankers'speeches overview of disclosure regime public disclosure of information also forms an important part of the market discipline pillar for the insurance sector – a sector the reserve bank assumed responsibility for in 2010 under the insurance ( prudential ) supervision act ( ipsa ). section 4 ( e ) of ipsa defines disclosure in the public interest : “ the desirability of providing to the public adequate information to enable the public to make [ their own ] decisions ”. the insurer public disclosure regime is based on accounting and audit standards ( enforced by the fma as is the case for registered banks ). for example, the financial reporting act requires all insurers to produce audited financial statements within four months of the financial year - end. these financial statements are available from the companies office website, while some insurers also publish them on their own website. licensed insurers are also subject to additional disclosure requirements imposed by ipsa and reserve bank standards and guidelines. under ipsa most licensed insurers must have, and disclose on its website, a financial strength rating prepared by an approved rating agency to policyholders before issuing and renewing insurance policies. the reserve bank also publishes these financial strength ratings on its website. overseas insurers must disclose the existence of any overseas policyholder preference if one exists. licensed insurers must also disclose their financial strength ratings to policyholders before entering into or renewing a contract of insurance. as part of reserve bank solvency standards, insurers are required to disclose solvency positions and regulatory capital information in their financial statements and on their website. ipsa requires that actuarial information contained in financial statements is reviewed by the licensed insurer ’ s appointed actuary and subject to a separate report which is included in the financial statements. guidance material on governance creates an additional expectation on insurers tied to the disclosure of governance arrangements to shareholders, policyholders and other stakeholders. imf f

extremely difficult to identify, price, allocate, and manage with accuracy. 1 https : / / www. bis. org / review / r151009a. pdf 2 https : / / www. rbnz. govt. nz / research - and - publications / speeches / 2019 / speech2019 - 07 - 11 # fn7 ; https : / / www. rbnz. govt. nz / about - us / the - journey - of - te - putea - matua - our - tane - mahuta in the jargon, ‘ market failure ’ is rife. we simply do not know the true scope and scale of the environmental risks we take on during our daily economic activities. likewise, many of the material costs of our economic decisions are ‘ externalised ’, that is, borne by others including future generations. there is no obvious market or price for selling climate risk, and hence no personal reward for managing it. and market participants often take a short - term, myopic, view in their decision making, pushing longer term problems to the never - never. what this means is that we will never have perfect information on the risks of climate change. however, firms ’ disclosure on how they identify and manage climate change risks greatly assist to sharpen our focus. after all, it is what gets measured that generally gets managed. and it is far often better to imperfectly measure something than ignore it completely. what we already know is that climate change holds far - reaching implications for new zealand ’ s financial system. these implications include physical impacts such as sea level rise and drought. for example, the national institute of water and atmospheric research ( niwa ) estimates $ 12. 5 billion of property is already exposed to extreme coastal flooding in new zealand, and that each 10cm of sea level rise puts another $ 2. 4 billion of assets at risk. 3 climate change also implies transition impacts - such as ‘ flight shame ’ or a shift to plantbased protein that will pose unique challenges for our highly concentrated export economy. agriculture is already staring down the challenge of a triple whammy : emission pricing, changes in consumer demand, and more extreme weather. the reserve bank ’ s climate strategy our climate strategy at the reserve bank has three avenues : incorporating the impact of climate change into our core functions ; managing our direct impact on the climate ; and leading through experience and collaboration. firm disclosure of climate risks assists all three avenues. disclosure will