Forward Focus - June 2013
Insurance and wealth management
Welcome to the June edition of Forward Focus for 2013.
Our latest Forward Focus looks at the changing role of capital management for an insurer and the landscape around it. We provide an update on the RBNZ solvency standards and its latest discussion papers, look at how insurers are starting to ask how they can do things differently or better in this area, and give an update on some of the challenges and uncertainties we have seen.
The Reserve Bank has publicly announced that it will be taking a stronger stand against insurers that are slow to comply, or in breach of its regulations. Under the Reserve Bank’s watch, an insurer’s solvency position and its measurement have become much more prescriptive and probably also easier to test. We are starting to see the ‘capital management function’ of an insurer and the industry around it start to evolve and become more important. Solvency regulations are almost akin to a new local legal system – with the Reserve Bank taking on the role of both the law maker and judiciary. There are natural developments of ‘taking advice’ for unclear positions, managing precedents for similar principles and using the rules as a benchmark or tool to change or improve yourself, that are all starting to happen. Regulation isn’t static and while the consultation papers and discussion documents are a welcome industry evolution, it does take time and resource to keep up and make sure you are on the latest page. Hopefully you will find this Forward Focus brings you up to date with a number of issues. Of course, please get in touch with us if anything strikes a point of interest or even if you disagree with our view. We see this changing landscape as an area of growth for everyone!