The Reserve Bank of New Zealand (RBNZ) is introducing regular one-on-one meetings with actuaries which will not be attended by the management or board members of the designated insurer.

The change comes after a review, conducted by the central bank’s Industry Insights and Thematics team, found a “risk that the impartiality of the Appointed Actuary could be adversely impacted by factors such as the influence of senior management and reporting lines”.

The report identified the need for increased engagement between the Reserve Bank and Appointed Actuaries.

“Regular, one-on-one meetings will be held between the Reserve Bank and the Appointed Actuary of designated insurers, without the insurer’s management or board members present,” a statement says.

At the end of their employment, Appointed Actuaries will also be expected to attend an exit interview with the central bank to “facilitate open, free and frank confidential discussions”.

At the time of the review there were 55 actuaries holding the role of the Appointed Actuary at 87 licensed insurers, of which 15 participated in the review.

Key areas singled out for improvement included identifying and managing conflicts of interest, engagement between insurers’ boards and Appointed Actuaries, guidance around the RBNZ’s explicit expectations regarding independence and impartiality, clarity of delegations, preparedness for the Appointed Actuary’s involvement in a crisis and processes for following up recommendations in Financial Condition Reports submitted by actuaries, which were “highly valued by insurers”.

Appointed Actuaries report on material risks that can threaten the financial condition and solvency of an insurer. The role entails providing impartial advice to an insurer’s board of directors and senior management to assist with sound decision making.

“The review concludes the regime and appointed actuary role are largely effective, but improvements can be made,” Deputy Governor and GM for Financial Stability Geoff Bascand said.

A number of the recommended improvements require legislative change and will be consulted on during the Insurance (Prudential Supervision) Act 2010 (IPSA) review.