As reported two weeks ago by Sunrise Exchange News, the NZ Government has released a review of insurance sector regulation, and the peak industry body has given it an initial thumbs-up.

After five years in development, the Review of Financial Products and Providers has been released along with nine discussion papers.

The papers deal with an overview of financial institutions, insurance, supervision of issuers, consumer dispute resolution and redress, non-bank deposit-takers, collective investment schemes, governance of mutuals, securities offerings, and platforms and portfolio management services.

Insurance Council of New Zealand CEO Chris Ryan told Sunrise Exchange News the council has organised a regulatory committee of 14 representatives from various NZ insurers, and a comprehensive response will be ready by December.

Mr Ryan has briefly assessed the discussion papers and says that on first impressions at least they seem pragmatic and not as prescriptive as Australia’s regulatory framework.

“It is early days, but we’ll be putting forward the views of the industry and making sure it protects the consumer and lowers compliance costs,” he said.

Previously a deposit of $500,000 and a rating was all that was necessary for a company to register as an insurer in NZ, but this new regulatory approach will require much more disclosure, minimum entry standards and higher education levels.

Among the new regulations is a requirement for annual condition reports as well as new “fit and proper” powers similar to those of the Australian Prudential Regulation Authority.

Mr Ryan says “fit and proper” standards will be good for the industry. “We have to maintain the reputation of the industry. It’s just at discussion stage, but for the condition reports we’ll be looking at how much, how often and the compliance costs.”