1 Title

2 Commencement

3 Purposes

4 Principles to be taken into account under this Act

5 Overview

6 Interpretation

7 Meaning of contract of insurance

8 Meaning of carrying on insurance business in New Zealand

9 Meaning of associated person and holding entity

10 Application of Act to friendly societies and credit unions

11 Bank's functions under Act

12 Bank must have regard to directions about Government policy objectives

13 Act binds the Crown

14 Persons that carry on insurance business in New Zealand must be licensed

15 Offence for person who is not licensed insurer to hold itself out to be licensed insurer

16 Application for licence as insurer

17 Applicant must provide fit and proper policy, fit and proper certificate, and risk management programme

18 Entitlement to licence

19 Carrying on business in prudent manner

20 Conditions of licence

21 Bank may modify conditions of licence

22 Offence to fail to comply with conditions of licence

23 Licensed insurer must report likely failure to comply with solvency margin imposed under licence conditions

24 Bank must notify applicant of decision and give notice on its Internet site

25 Bank must be notified before controlling interest is acquired or obtained and before corporate form is changed

26 Bank must notify decision within 20 working days of receiving all relevant information

27 Meaning of controlling interest

28 Cancellation of licence

29 Assignment of liabilities to enable cancellation

30 Bank's approval of assignment

31 Effect of assignment

32 Licensed insurer must be subject to fit and proper policy for directors and relevant officers

33 Group fit and proper policy

34 Fit and proper matters

35 Licensed insurer must provide fit and proper certificate for new directors or relevant officers or if Bank requires certificate

36 Bank may exempt overseas insurers from compliance with section 35(1)

37 Power to remove directors and relevant officers

38 How power to remove is exercised

39 Former director or relevant officer must not accept reappointment in breach of direction

40 Appeals from Bank's decision

41 Appeal to Court of Appeal on question of law

42 Transfers and amalgamations must be approved

43 Request for approval

44 Actuarial report on transfer or amalgamation proposal

45 Costs of actuary's report

46 Bank must have regard to certain matters in considering request

47 Bank's decision on approval

48 Offence to fail to comply with conditions of approval

49 Requirement for approval is in addition to requirements under other enactments

50 Transfer or amalgamation not invalidated

51 Effect of assignment for purposes of approved transfer

52 Publication of policies

53 Bank may issue solvency standards

54 Public notice of solvency standards

55 Consultation

56 Matters that may be contained in solvency standards

57 Offence to fail to comply with financial condition report requirements

58 Incorporation by reference

59 Bank may amend or revoke solvency standard

60 Bank may exempt overseas insurers from compliance

61 Licensed insurer must have current financial strength rating

62 Bank may approve rating agencies

63 Licensed insurer must notify Bank of change in rating or credit watch warning

64 Disclosure of current rating to policyholder

65 Disclosure by insurers not required to be rated

66 Policyholder may cancel if disclosure is not made

67 Disclosure of rating on licensed insurer's Internet site

68 Other advertising of ratings

69 Licensed insurer must disclose downgrading in rating to policyholders under contracts of insurance with duration of more than 1 year

70 Licensed insurer must not disclose or advertise ratings from non-approved agencies

71 Offence to fail to comply with disclosure obligations

72 Overseas insurer must disclose overseas policyholder preference

73 Licensed insurer must be subject to and comply with risk management programme

74 Group risk management programme

75 Offence to fail to comply with risk management requirements

76 Requirement for licensed insurers to have appointed actuary

77 Review of actuarial information in financial statements

78 Appointed actuary's report

79 Provisions relating to auditor's report and audit conducted by auditor

80 Access to information

81 Financial statements must be given to Bank

82 Requirement that life insurer have statutory funds

83 Overview of requirements regarding statutory funds

84 Meaning of life policy

85 Composite policies

86 Interpretation in this subpart

87 Duty of life insurer in relation to statutory funds

88 Notice to Bank when fund established

89 Assets of statutory fund

90 Identification of life policies referable to statutory fund

91 Payments to statutory fund

92 Capital payments to statutory funds

93 Expenditure and application of statutory fund

94 Prohibition of reinsurance between funds

95 Effect of non-compliance with section 93: general

96 Effect of non-compliance with section 93: certain classes of transactions

97 Investment performance guarantee: limit of certain liabilities

98 Investment of statutory funds

99 Recording of restricted investments

100 Transfer of assets between funds

101 Restriction on restructure or termination of statutory funds

102 Ascertainment of income and outgoings of statutory fund

103 Duty of directors in relation to statutory funds

104 Bank may give notice

105 Liability of directors

106 Bank’s power to sue in name of life insurer

107 Restructure of statutory funds

108 Termination of statutory funds

109 Additional requirements for transfer of life policies between statutory funds by endorsement

110 Life insurer must allocate operating profits and losses in accordance with prescribed requirements

111 Allocation of capital

112 Distribution of retained profits

113 Distribution of shareholders’ or members' capital

114 Application of statutory fund assets

115 Liability of directors for loss to statutory fund

116 Offence to fail to comply with subpart

117 Bank may exempt overseas insurers from compliance with subpart

118 Prudential supervision

119 Supply of information by licensed insurers for purposes of prudential supervision

120 Notice may require supply of information, data, or forecasts in relation to associated persons

121 Associated persons may be required to supply information to licensed insurers

122 Supply of information by other persons for purposes of prudential supervision

123 Requirement that information, data, or forecasts be audited or reviewed

124 Bank may require report relating to licensed insurers or associated persons

125 Disclosure of information to Bank by auditors and actuaries

126 Auditor or actuary to inform of intention to disclose

127 Protection of auditors and actuaries

128 Investigations

129 Power to obtain information or documents

130 Power to enter and search place

131 Offences in relation to investigations

132 Effect of final decision that exercise of powers under sections 128 and 129 unlawful

133 Confidentiality of information

134 Limits on further disclosure of information

135 Application of other enactments to information published or disclosed under section 133

136 Bank may require licensed insurer to prepare recovery plan

137 Recovery plan must be provided to Bank for approval

138 Licensed insurer must comply with recovery plan

139 Amendments to recovery plan

140 Offence to fail to comply with recovery plan requirements

141 Bank may give directions to licensed insurer

142 Scope of directions to licensed insurer

143 Bank may give directions to associated person

144 Scope of directions to associated person

145 Miscellaneous matters relating to directions

146 Offence to contravene directions

147 Power to remove, replace, or appoint directors, auditor, or actuary

148 Offence to disclose giving of direction or notice

149 Bank may apply for liquidation of insurers

150 Bank may apply for High Court to reduce value of contracts of insurance

151 Bank may apply for voluntary administration of licensed insurers

152 Bank's approval for voluntary liquidation or appointment of administrator by company

153 Bank may make certain applications in respect of voluntary administration or liquidation and appear and be heard in proceedings

154 Bank's participation in arrangements, amalgamations, and compromises under Companies Act 1993

155 Bank must be sent copy of applications under Parts 14 to 16 of Companies Act 1993

156 Bank must be sent copies of certain documents and may inspect certain accounts and records

157 Attendance of representative of Bank at certain meetings for insurer in voluntary administration, subject to deed of company arrangement, or in liquidation

158 Bank may require meeting of creditors or shareholders to appoint liquidation committee

159 High Court may reduce value of contracts of insurance

160 High Court may require actuarial report

161 Continuation of life policies if insurer in liquidation

162 Liquidator or deed administrator may apply to High Court for approval of scheme of transfer of insurance business

163 Right to attend and be heard

164 Approval of scheme

165 Effect of approval

166 Application by Bank for directions to liquidator, administrator, or deed administrator

167 Valuation of policies by liquidator or deed administrator

168 Statutory management of licensed insurers and associated persons

169 Statutory management of overseas persons

170 Date and time of appointment

171 Grounds on which licensed insurer may be declared to be subject to statutory management

172 Grounds on which associated person may be declared to be subject to statutory management

173 Bank must give notice of recommendation

174 Application of this subpart to joint statutory managers, associated persons, and subsidiaries

175 Continuation of statutory management of companies restored to New Zealand register

176 Considerations affecting exercise of powers by statutory manager

177 Statutory manager to comply with directions of Bank

178 Application of Corporations (Investigation and Management) Act 1989

179 Act does not limit application of Corporations (Investigation and Management) Act 1989

180 Powers to obtain documents and information

181 Sale requires Bank's approval

182 Consents not required under other enactments

183 Statutory manager may form body corporate to acquire business of branch of overseas person

184 Vesting of property subject to security

185 Proof of vesting

186 Provisions applying if liabilities included in sale

187 Obligations incurred by statutory manager

188 Statutory manager may value policies

189 Value of contracts of insurance may be reduced by Order in Council

190 Appointment of auditor and actuary

191 Prior auditor or actuary ceases to hold office

192 Removal of auditor or actuary

193 Annual financial statements

194 Annual report by statutory manager

195 Termination of statutory management by Order in Council

196 Termination of statutory management on liquidation

197 Time of termination

198 Lloyd's underwriters must not carry on insurance business in New Zealand unless Lloyd's holds licence

199 Lloyd's may apply for licence on behalf of underwriting members

200 Lloyd's fit and proper policy and risk management programme

201 Lloyd's underwriters may carry on insurance business in New Zealand if Lloyd's holds licence

202 Issue of licence to Lloyd's

203 Conditions of Lloyd's licence

204 Provisions that do not apply in respect of Lloyd's or Lloyd's underwriters

205 Bank may direct that Lloyd’s underwriters must not issue or renew contracts of insurance

206 Agent of Lloyd’s and address for service

207 Lloyd’s to give notice of enactments and bylaws

208 Act does not authorise Lloyd’s underwriter to carry on any business underwriter could not otherwise have carried on

209 Access to information by overseas supervisor

210 Duties of person on receipt of notice under section 209

211 False declarations and representations

212 Liability of directors

213 Defence for offences against this Act

214 Prohibition against falsely holding out New Zealand connection

215 Certain New Zealand persons and overseas companies prohibited from using certain words in name

216 Prohibition does not apply in certain cases

217 Insurer's constitution must not permit directors to act in holding entity's best interests even though it is not in insurer's best interests

218 Power to ban certain persons from participating in insurance business

219 Notice of hearing

220 Appeals to High Court

221 Appeal to Court of Appeal on question of law

222 Register of banned persons

223 Search of register

224 Offence for banned person to participate in insurance business in breach of order

225 Notice and service of documents

226 Protection from liability

227 Indemnity

228 General provisions relating to exemptions

229 Regulations

230 Amendments to Life Insurance Act 1908

231 Repeals

232 Amendments to other enactments

233 Bank must issue provisional licence pending consideration of application

234 Bank may also issue provisional licence for insurer that is or will be in run-off

235 Duration of provisional licence

236 Provisional licence holder only required to comply with requirements to extent required by conditions

237 Conditions of licence

238 Public Trust must return deposits

239 Deposit may be withdrawn in accordance with Insurance Companies' Deposits Act 1953 or Life Insurance Act 1908