COMPLIANCE NEWS - INSURERS

ISSUE DECEMBER | 2021

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Bills before Select Committee
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Bulletins

Reserve bank changes the date for implementation of the ISS
The Government intoduces new climate-related disclosure regime
FMA sets target dates for full FAP licence applications
Progress Report
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Reserve Bank changes the date for implementation of the Interim Insurance Solvency Standards

The Reserve Bank has changed the date in which the Interim Insurance Solvency Standards (as discussed in our August Newsletter) are set to come into force.

Initially, the Reserve Bank planned on the Interim Solvency Standards to come into force on 1 January 2022 to allow for early adopters of IFRS 17 to have a solvency standard to work to. During the consultation period, the Reserve Bank became aware that insurers may find it difficult to be ready for the implementation date of the new interim standard by 1 January 2022. They also became aware that there did not seem to be any insurers who planned to early-adopt IFRS-17.

The Interim Solvency Standards will now be implemented on 1 January 2023 which aligns with the date which insurers must adopt IFRS 17. The final interim standard is expected to be published by 1 October 2022.

The Financial Sector (Climate-related Disclosure and Other Matters) Amendment Bill has now received royal assent. The Bill will amend the Financial Markets Conduct Act 2013, the Financial Reporting Act 2013 and the Public Audit Act 2001 to require some entities (‘Climate Reporting Entities’) to make climate-related disclosures for financial years commencing in 2022.

The regime will apply to large insurers with total assets under management greater than $1 billion or annual premium income greater than $250million will be required to make disclosures under the new regime. The regime also applies to other entities including registered banks, building societies and equity and debt issuers listed on the NZX.

Under the regime, Climate Reporting Entities will need to: Collect and retain climate-related information; Disclose certain climate-related information as part of their reporting obligations in line with climate standards to be prepared by the External Report Board (XRB); and Have a qualified climate assurance practitioner verify all reporting of greenhouse gas emissions.

FMA sets target dates for full FAP licence applications

The FMA has released further guidance on when transitional financial advice providers should aim to apply for their full licenses under the new financial advice regime. It is anticipated that all transitional financial advice providers should apply for their Class 1 or Class 2 full licences by 30 September 2022 and Class 3 licence applicants should look to apply by 30 June 2022.

The FMA has emphasised the importance of applicants getting their applications in on time to ensure they have a full licence processed before their transitional licence expires. This timing should give applicants enough time to amend any potential errors in their applications.

All transitional licences will expire 16 March 2023. Please get in touch if you wish to discuss any queries you may have on applying for a full licence.

PROGRESS REPORT

Financial Markets (Conduct of Institutions) Amendment Bill

The Finance and Expenditure Select Committee reported on the Financial Markets (Conduct of Institutions) Amendment Bill on 7 August. The Bill now awaits its second reading.

Insurance Contract Law Review

The exposure draft Bill for consultation was anticipated to be released mid-2021. We will continue to provide updates as they are released.

Disclaimer: The information contained in this newsletter is provided for general purposes only, and should not be construed as legal advice on any matter.