Regulation for New Zealand’s insurance industry is certainly on the way, but as yet the Government hasn’t figured out what form it will take. Speaking at last week’s brokers’ conference in Rotorua, Commerce Ministry adviser Geoff Connor said NZ wants to “build a seamless economic market with Australia”.

At present the NZ industry has a “light-handed” regulatory regime that conflicts with Australia’s approach. “It’s no secret that Australia has more rigorous regulation than NZ in quite a few areas,” Mr Connor said. “We have to decide how to make our regulation compatible with Australia’s while still recognising the very real differences between the two countries.”

Noting that much of NZ’s insurance is “provided from Australia by insurers who are also subject to Australian law”, he said the Government will investigate which features of Australia’s Financial Services Reform Act work and which don’t. “The new Australian regime has been heavily criticised for the compliance costs it has imposed.”

A report on life insurance regulation is due by the end of October, and Mr Connor warned this “will have implications for brokers”. However, he did offer some comfort, saying the Government has “an open mind” on the matter.