The Insurance Council of New Zealand welcomes the review of the legislation that regulates insurers that was announced today. The Reserve Bank of New Zealand is the prudential supervisor of insurers in New Zealand and operates under the Insurance Prudential Supervision Act (IPSA) with the purpose of promoting a sound and efficient sector and promoting public confidence in the insurance sector. “The Act was passed over six years ago, so it is timely in light of experiences since then and the pace of change in the sector globally to review matters. Ideally, the review should be conducted independently of the Reserve Bank, but the process they have outlined today provides plenty of scope for input,” Insurance Council Chief Executive Tim Grafton said. Insurers will have an opportunity to identify issues that they want to be considered and the RBNZ will review those and consult further on policy options that arise. Further consultation will occur with an exposure draft of proposed legislative changes. Any new law will not be enacted till 2018 at the earliest and the RBNZ has committed to a transition period to manage any changes. “It is pleasing to see that the RBNZ has identified potential issues to address that have been a concern to us such as contracts that appear to be insurance contracts but which are not. An example is insurance contracts provided by some rental car companies. Such contracts mislead the public and limit their rights,” Mr Grafton said. “This is just one aspect of many substantial issues the first phase of the review raises. The Insurance Council will be consulting with its members to coordinate an industry response.” “We are also keen to see greater transparency and cost-benefit analysis around RBNZ decision-making,” he said.