Key
1 Title
2 Commencement
Part 1
Preliminary provisions
Purposes and principles
3 Purposes
4 Principles to be taken into account under this Act
Overview
5 Overview
Interpretation
6 Interpretation
7 Meaning of contract of insurance
8 Meaning of carrying on insurance business in New Zealand
8A Bank may declare that person is not carrying on insurance business in New Zealand in certain circumstances
9 Meaning of associated person and holding entity
10 Application of Act to friendly societies and credit unions
Bank's functions
11 Bank's functions under Act
12 Bank must have regard to directions about Government policy objectives
Act binds the Crown
13 Act binds the Crown
Part 2
Licensing and prudential regulation of insurers
Subpart 1—Licensing of insurers
Requirement to be licensed
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
Process for obtaining licence
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
Conditions of licence
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
23 Licensed insurer must report likely failure to comply with solvency margin imposed under licence conditions
Notification of decision
24 Bank must notify applicant of decision and give notice on its Internet site
Bank must be notified before control is obtained and before corporate form is changed
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
25 Bank must be notified before control is obtained
26 Bank must be notified before corporate form is changed
27 Bank must consider whether it is still satisfied as to licensing matters
27A Offence to fail to notify or provide information
Cancellation of licence
28 Cancellation of licence
29 Assignment of liabilities to enable cancellation
30 Bank's approval of assignment
31 Effect of assignment
Fit and proper requirements
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
34 Fit and proper standards
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
Transfers and amalgamations
42 Transfers and amalgamations must be approved
43 Request for approval
44 Actuarial or other report on transfer or amalgamation proposal
45 Costs of 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
Publication of policies
52 Publication of policies
Subpart 2—Prudential regulation of insurers
Solvency standards
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 reporting and disclosure requirements
58 Incorporation by reference
59 Bank may amend or revoke solvency standard
60 Bank may exempt overseas insurers from compliance
Financial strength ratings
61 Licensed insurer must have current financial strength rating
61A Financial strength rating must refer to overseas policyholder preference
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
69 Licensed insurer must give public notice of downgrade or notice to policyholders
70 Licensed insurer must not disclose or advertise ratings from non-approved agencies
71 Offence to fail to comply with disclosure obligations
Disclosure of overseas policyholder preference
72 Overseas insurer must disclose overseas policyholder preference
Risk management
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
Appointment of actuary and actuarial review
76 Requirement for licensed insurers to have appointed actuary
77 Review of actuarial information in, or used in the preparation of, financial statements
78 Appointed actuary's report
79 Provisions relating to auditor's report
80 Access to information
Supply of financial statements
81 Financial statements must be given to Bank
Subpart 3—Statutory funds of life insurers
General requirements
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
88A Life insurer must transfer assets on establishment
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
Duties and liabilities of directors, etc
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
Restructure and termination of statutory funds
107 Restructure of statutory funds
108 Termination of statutory funds
Additional requirements for transfer of life policies between statutory funds by endorsement
109 Additional requirements for transfer of life policies between statutory funds by endorsement
Allocation of profits and losses and of capital payments and distribution of profits and capital
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
Application of statutory fund assets on liquidation or winding up
114 Application of statutory fund assets
Liability of directors for loss to statutory fund
115 Liability of directors for loss to statutory fund
Offence
116 Offence to fail to comply with subpart
Exemptions
117 Bank may exempt overseas insurers from compliance with subpart
Part 3
Prudential supervision of licensed insurers
Bank to undertake prudential supervision
118 Prudential supervision
Supply of information
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
Investigations
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
Miscellaneous provisions
133 Confidentiality of information, data, documents, and forecasts
134 Limits on further disclosure of information, data, documents, or forecasts
135 Application of other enactments to information, data, documents, or forecasts published or disclosed under section 133
Part 4
Distress management
Subpart 1—Recovery plans
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
Subpart 2—Directions to licensed insurers and associated persons
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
Subpart 3—Liquidation or voluntary administration of licensed insurers
Bank may apply to put insurer into liquidation or voluntary administration, or apply for reduction of value of contracts of insurance
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
Bank's approval for voluntary liquidation or appointment of administrator by company
152 Bank's approval for voluntary liquidation or appointment of administrator by company
Bank's participation in insolvency procedures and certain other proceedings
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
Special insolvency provisions for insurers
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
Subpart 4—Statutory management
Commencement of statutory management
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
Exercise of powers
176 Considerations affecting exercise of powers by statutory manager
177 Statutory manager to comply with directions of Bank
Application of Corporations (Investigation and Management) Act 1989
178 Application of Corporations (Investigation and Management) Act 1989
179 Act does not limit application of Corporations (Investigation and Management) Act 1989
Power to obtain documents and information
180 Powers to obtain documents and information
Sales and dispositions
181 Sale requires Bank's approval
182 Consents not required under other enactments
Body corporate may be formed to acquire branch of overseas person
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
Obligations incurred by statutory manager
187 Obligations incurred by statutory manager
Value of contracts of insurance
188 Statutory manager may value policies
189 Value of contracts of insurance may be reduced by Order in Council
Auditor, actuary, and annual financial statements and records
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
Termination of statutory management
195 Termination of statutory management by Order in Council
196 Termination of statutory management on liquidation
197 Time of termination
Part 5
Miscellaneous provisions
Provisions relating to Lloyd's
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
200A Bank must issue temporary licence to Lloyd's pending consideration of its application
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
203A Obligations on Lloyd's
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
Access to information by overseas supervisor
209 Access to information by overseas supervisor
210 Duties of person on receipt of notice under section 209
Offences
211 False declarations and representations
212 Liability of directors
213 Defence for offences against this Act
Prohibition against falsely holding out New Zealand connection
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
Restriction on insurer's constitution
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
Ban ordered by District Court
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
Notice and service
225 Notice and service of documents
Protection from liability and indemnity
226 Protection from liability
227 Indemnity
General provisions relating to declarations and exemptions
228 General provisions relating to declarations and exemptions
General provisions relating to fit and proper standards and solvency standards
228A Status of standards
228B Public notice of standards
228C Consultation
228D Bank may amend, revoke, or replace standard
Regulations
229 Regulations
229A Regulations may provide for exemptions
Repeals and consequential amendments
230 Amendments to Life Insurance Act 1908
231 Repeals
232 Amendments to other enactments
232A Amendment to Financial Service Providers (Registration and Dispute Resolution) Act 2008
Transitional provisions
232B Bank may approve certain transfers
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
Schedule 1
General provisions relating to incorporation by reference
Schedule 2
General provisions relating to search powers
Schedule 3
Consequential amendments
Legislative history