NEW ZEALAND Law and Practice Contributed by: Aaron Sherriff, Tanya Wood and Nick Laing, Duncan Cotterill
General Regulation Insurers carrying on business are also subject to cor- porate tax and company statutes, as well as to con- sumer protection and anti-money laundering legisla- tion, including as follows: • the Anti-Money Laundering and Countering Financ- ing of Terrorism Act 2009; • the Companies Act 1993; • the Consumer Guarantees Act 1993; • the Contract and Commercial Law Act 2017; • the Fair Trading Act 1986; • the Financial Reporting Act 2013; • the Goods and Services Tax Act 1985; • the Income Tax Act 1994; • the Tax Administration Act 1994; and • the Taxation Review Authorities Act 1994. 2.2 Writing of Insurance and Reinsurance The RBNZ licenses insurers and reinsurers, and applies the IPSA regime (see 2.1 Insurance and Reinsurance Regulatory Bodies and Legislative Guidance ). A licence is required to carry on insurance business in New Zealand. There are no specifically different licensing requirements between the requirements for writing consumer insurance, SME insurance and cor- porate insurance. The insurer must demonstrate to the RBNZ that its governance processes and risk management pro- cesses are adequate, and that its directors and senior managers are fit and proper (including the appointed actuary). The RBNZ can issue a licence subject to conditions. The IPSA regime exempts overseas insurers from compliance with some provisions where their home jurisdiction imposes solvency and fit-and-proper requirements that are equivalent to those in New Zea- land. There is no distinction in the IPSA regime that applies to the underwriting of excess layers or to reinsurance contracts.
Life insurance policies must comply with the Finan- cial Markets Conduct Act 2013 (policies sold after 1 December 2014). Codes of conduct apply to most insurers. Almost all life insurers belong to the Financial Services Council, which has a Code of Conduct that members must comply with. The Insurance Council of New Zealand (ICNZ), of which most major insurers are members, also has a Fair Insurance Code that requires its mem- bers to act ethically and to be financially sound. Prudential Requirements The Insurance (Prudential Supervision) Act 2010 (IPSA) sets out the regulatory and prudential require- ments framework for insurers carrying on business in New Zealand. Under the IPSA, insurers and reinsurers are treated in the same way, with the regime applying to every “person” carrying on insurance business. A “person” includes a company or association of persons operat- ing or formed in New Zealand. If the “person” meets the registration requirements under the Companies Act 1993, they are also subject to the IPSA regime. The “carrying on business” test is met if the person acts or has acted as an insurer in New Zealand or elsewhere, and the person must also be liable to a New Zealand policyholder under a contract of insur- ance. The RBNZ began a review of the IPSA in 2016, and made recommendations for the modernisation of insurance prudential regulation in December 2024. The New Zealand government has agreed to a set of recommendations to progress an amendment bill to make changes to the IPSA. It is expected that an exposure draft of the IPSA amendment bill will be released for public consultation in the first quarter of 2026. There are four key aspects to the reform: • a more proactive and intensive approach to super- vision;
• greater oversight of overseas insurers; • enhancing policyholder security; and • refining the scope of the legislation.
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