The Reserve Bank of New Zealand (RBNZ) has announced a review of the Insurance Prudential Supervision Act 2010, releasing an issues paper for public consultation.

The Insurance Council of New Zealand (ICNZ) has welcomed the move, but says an independent review would have been preferable.

“The Act was passed more than six years ago, so it is timely, in light of experiences since then and the pace of change in the sector globally, to review matters,” ICNZ CEO Tim Grafton said. “Ideally, the review should be conducted independently of the Reserve Bank, but the process it has outlined today provides plenty of scope for input.”

Insurers will have an opportunity to identify issues they want considered, and the RBNZ will review these and consult further on policy options that arise.

Any new law will not be enacted until next year at the earliest, and the bank has committed to a transition period to manage any changes.

Mr Grafton says it is pleasing that some issues of concern to insurers have already been raised, including “contracts that appear to be insurance contracts, but which are not”.

“An example is insurance contracts provided by some rental car companies,” Mr Grafton said.

“Such contracts mislead the public and limit their rights. This is just one aspect of many substantial issues the first phase of the review raises.

“The ICNZ will be consulting with its members to co-ordinate an industry response.”

To read the issues paper and for more information on submissions, click here.