the health and conduct of the sector. the reserve bank ’ s insurance agenda for the coming year ( or years ) is thus very full. we are committed to openly communicating our development priorities to insurers and the wider public, so that individuals and firms have the opportunity and ability to be an active participant in the policy development. https : / / www. rbnz. govt. nz / news / 2019 / 01 / fma - and - rbnz - report - on - life - insurer - conduct - and - culture ref # 8609867 v1. 2 page 7 of 7 what we ask of you, is that you engage openly and early with us, and that you heed the lessons of the banking and life insurer conduct and culture reviews. we look forward to working with the industry and other interested parties as we embark upon this next phase of our insurance supervision development. thank you for your time today, and in the near - future. ref # 8609867 v1. 2

building confidence and reducing risks in the insurance sector a speech delivered at the insurance council of new zealand conference on 5 november 2019, auckland, new zealand by adrian orr, governor ref # 8609867 v1. 2 page 2 of 7 “ you never know these days. uninvited guests may force you to take an unplanned trip to an unknown destination ; doesn ’ t hurt to be in your sunday clothes. ” – anurag shourie, half a shadow tena koutou katoa my thanks to the insurance council for inviting me to speak with you this morning. it is a pleasure and privilege to be here. in the almost - decade since parliament passed the insurance act in 20101, the insurance industry has had to deal with the consequences of many ‘ uninvited guests ’. the christchurch and kaikoura earthquakes presented unique ongoing challenges to the industry. so too have other single - firmspecific events, such as the failure and liquidation of cbl insurance. furthermore, the findings from the australian royal commission and our recent conduct and culture review - jointly undertaken with the financial markets authority ( fma ) - demonstrate the need for ongoing constructive change across the sector. i am going to share with you today the reserve bank ’ s perspectives on some of these events, and about the future direction of our insurance policy and supervision work - including some of the initiatives that we will seek your feedback on in due course. our desire is to ensure that the insurance sector is financially sound and trusted. we must be in our best ‘ sunday clothes ’ all week long. promoting soundness and confidence is challenging the insurance industry is a crucial part of any modern economy. it is the part of the ecosystem that society relies heavily on to both mitigate risks and / or transfer the risk - burden to those best able to manage it. there are just under 90 licensed insurers operating in new zealand. through the insurance act, the reserve bank is tasked with maintaining the soundness of the insurance sector, and public confidence in the sector. by definition, this task is far from straight forward. the nature of insurance contracts can vary greatly between insurers or insured events, and are often dependent on the individual circumstances of the policy holder. furthermore, there are significant information - asymmetries between an insurance provider and their customer, and the risks of providing poor or outdated information run in both directions. ‘ who is good for what, and