This notice, which comes into force on the day after the date of its notification in the Gazette, exempts Insurance Australia Group Limited (IAG Ltd) from the prudential requirements of Part 5D of the Reserve Bank of New Zealand Act 1989 (the Act), namely—

• the requirement to have a current credit rating (section 157I of the Act):

• governance requirements (section 157L of the Act):

• the requirement to have a risk management programme (section 157M of the Act):

• minimum capital requirements (sections 157Q and 157R of the Act):

• capital ratio requirements (sections 157T and 157U of the Act):

• related party exposures requirements (sections 157X and 157Y of the Act):

• liquidity requirements (sections 157ZA and 157ZB of the Act).

The Reserve Bank of New Zealand (the Bank), after taking into account the principles set out in section 157F of the Act and satisfying itself as to the matters set out in section 157G(2) of the Act, considers it appropriate to grant the exemptions because—

• the Bank is satisfied that compliance with the Part 5D regime, with its attendant compliance costs, is unduly onerous and burdensome in the circumstances. The circumstances are that IAG Ltd is an Australian incorporated company, authorised as a non-operating holding company of general insurance companies under the Insurance Act 1973 (Aust), and subject to prudential supervision by the Australian Prudential Regulation Authority. In addition, IAG Ltd’s lending activity is limited to members of its corporate group that are not carrying on the business of borrowing and lending money:

• for the reason given above, the Bank is satisfied that the exemption is consistent with the maintenance of a sound and efficient financial system:

• the fact that the exemption has conditions imposed ensures that the exemption is not broader than necessary to address the matters that gave rise to the exemption.